Free MLO: Mortgage Loan Origination (SAFE MLO) Exam Questions and Answers
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Last updated: September 19, 2026
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Question #1
A borrower obtains a 2-1 buydown mortgage loan with a 30-year term and a 6% note rate. The borrower's payments will be calculated based upon which of the following?
Please select an optionIncorrectCorrect answer: C
A 2-1 buydown reduces the rate by 2% in year one and 1% in year two, so payments are figured at 4%, then 5%, then the 6% note rate for the remaining term.
Was this answer correct?Question #2
According to Fannie Mae, a loan with a purchase transaction loan amount of $160,000, sales price of $180,000, and an appraised value of $200,000 has a loan-to- value ratio of what percentage?
Please select an optionIncorrectCorrect answer: C
Fannie Mae divides the loan amount by the lesser of the sales price ($180,000) or the appraised value, so 160,000 / 180,000 = 88.9%, which rounds up to 89%. Using the appraised value would wrongly give 80%.
Was this answer correct?Question #3
Which of the following factors is not required to be taken into account when determining a borrower's ability to repay a loan?
Please select an optionIncorrectCorrect answer: C
The ATR rule requires consideration of income, assets, employment, debts, alimony, child support, simultaneous loans, DTI and credit history; expected proceeds from selling the collateral are not a permitted repayment factor.
Was this answer correct?Question #4
A borrower's monthly debt-to-income ratio is calculated by taking the:
Please select an optionIncorrectCorrect answer: B
The total (back-end) DTI is all eligible recurring monthly debts, including the proposed housing payment, divided by gross monthly income.
Was this answer correct?Question #5
Which of the following practices is a prudent and reasonable cybersecurity precaution regarding laptop computers?
Please select an optionIncorrectCorrect answer: D
An automatic inactivity timeout that forces re-authentication limits exposure if a laptop is left unattended or lost; the other options are either impractical or violate basic credential-security principles.
Was this answer correct?Question #6
Which of the following settlement service charges is considered a finance charge for the purpose of calculating a loan's APR?
Please select an optionIncorrectCorrect answer: B
An origination charge is imposed by the creditor as a condition of credit and is therefore a finance charge included in the APR, whereas credit report fees, transfer taxes and recording fees are excluded under Regulation Z.
Was this answer correct?Question #7
Which of the following characteristics is unique to a home equity line of credit (HELOC)?
Please select an optionIncorrectCorrect answer: A
A HELOC is open-end credit: the borrower may draw additional advances against the line during the draw period, which a closed-end mortgage does not allow.
Was this answer correct?Question #8
When providing documents to a state regulator regarding a consumer complaint that was submitted to the state regulator, a licensed company should:
Please select an optionIncorrectCorrect answer: C
A regulator investigating a complaint is entitled to the full, unredacted records without consumer consent; the company should supply them together with its explanation of what caused the complaint.
Was this answer correct?Question #9
Which of the following documents is required to be issued to a customer when a mortgage loan originator is also a real estate broker on the same transaction?
Please select an optionIncorrectCorrect answer: D
When the originator also acts as real estate broker on the transaction, RESPA requires an Affiliated Business Arrangement disclosure describing the relationship and that the consumer is free to use other providers.
Was this answer correct?Question #10
Which of the following circumstances may indicate fraud with respect to the assets a borrower will use for closing?
Please select an optionIncorrectCorrect answer: A
Large or unexplained deposits not supported by the borrower's income or disclosed sources are a classic red flag for undisclosed borrowed funds or asset fraud; gifts, pending parental loans and bonuses are disclosed, verifiable sources.
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