Your guide to the NMLS practice test

Passing the NMLS test is notoriously difficult. In fact, the first-time pass rate is just over half at 54% and just 46.7% for subsequent attempts, according to the NMLS SAFE test passing rate.

That is why it is important to study as much as possible before you take the test. As part of that preparation, one of the best approaches is to take an NMLS practice test. This will ensure that you have the best shot possible to become a licensed mortgage loan originator.

But what types of questions are asked on the NMLS test? What are some of the other tips available for passing the NMLS? Where can you find NMLS practice tests? In this article, we will answer these questions and more.

Here is your guide for the NMLS practice test.

NMLS practice test: what is the NMLS exam?

The Nationwide Mortgage Licensing System (NMLS) test is a professional certification required for anyone who wants to originate mortgages and give home loan advice. Essentially, if you want to become a licensed mortgage loan originator, you will need to pass the NMLS test. And one great way to prepare is to take an NMLS practice test.

The NMLS is a centralized online database used by finance and mortgage regulatory agencies to ensure that state licensing programs are maintained. Both individual mortgage loan originators and mortgage lending companies must remain in regulatory compliance. And that includes renewing their state licenses each year.

NMLS practice test: what is on the real test?

Your NMLS practice test will prepare you for the real thing. The NMLS test has 120 questions, with 115 of those questions being scored. You will have 190 minutes (about 3 hours) to complete the NMLS test. This time frame gives you essentially a minute and a half to answer each question.

When taking the NMLS test, you will not know which questions are unscored or scored. This means if you are to pass the NMLS test, you will need to be diligent and answer all questions as best as you can. To pass, you will need a score of 75% or higher.

There's a number of topics covered on the exam. Studying and taking an NMLS practice test is crucial to passing.

Here is a breakdown of what you can expect to see on the NMLS test:

• Federal mortgage-related laws: 24%
• Uniform state content: 11%
• General mortgage knowledge: 20%
• Mortgage loan origination activities 27%
• Ethics: 18%

Because of the number of topics covered, and not knowing which specific laws and practices will be asked, taking an NMLS practice test is very important.

NMLS practice test: how do I pass the exam for the first time?

While passing the NMLS test on your first try may be difficult, it is possible. With the right education, study, and practice, you will achieve your goal of becoming a licensed mortgage loan originator.

Here is a quick look at passing the NMLS test for the first time:

1. Complete a mortgage pre-licensure education course
2. Take an NMLS practice test course
3. Know the NMLS test breakdown
4. Read every question over
5. Use your time wisely
6. Answer all questions
7. Eliminate negatives
8. Use process of elimination
9. Know your mortgage laws/regulations
10. Be well-rested

Let’s break down each of these tips to ensure you are prepared to take the NMLS test:

1. Complete a mortgage pre-licensure education course

Through the SAFE Act of 2008, every student is mandated to complete at least a 20-hour course prior to taking the NMLS test. Some states require additional education. Whether or not that’s true in your state, it is best to start with a high-quality mortgage pre-licensure education course. It will help with your NMLS test and ultimately prepare you to help your clients achieve their own dream: homeownership.

2. Take an NMLS practice test course

One of the best ways to prepare is to invest in an NMLS exam prep course and take practice tests. This way, you will have the resources you need to practice more effectively. This is a great way to increase your chances of passing the NMLS test on your first attempt.

3. Know the NMLS test breakdown

While this information was listed previously in this article, we figured it should also be included in this list. You will be given 190 minutes (about 3 hours) to take the NMLS test. You will have to answer 120 multiple-choice questions, 115 of which will be scored and five unscored. These questions cover several different areas, which include:

• Federal mortgage-related laws: 24%
• Uniform state content: 11%
• General mortgage knowledge: 20%
• Mortgage loan origination activities 27%
• Ethics: 18%

4. Read every question over

This is good practice not only for the NMLS test, but for all tests. Reading every question twice ensures that you understand every aspect of the question. Because multiple-choice tests are so detail-oriented, understanding the question in its entirety is crucial.

5. Use your time wisely

If you use your time wisely, you will be able to revisit questions you perhaps needed more time on. If you are unsure about a question, you can skip it and revisit it later.

6. Answer all questions

The NMLS test differs from some other exams in that there are no penalties for answering a question incorrectly. Therefore, make sure you answer all questions before you complete the exam. This will give you the best chance of passing.

7. Eliminate negatives

Positive answers are more likely correct than negative ones, according to this handbook. Be aware of questions that have double negatives—read those carefully. Try reading the question without the negatives to gain a clearer understanding of what the question is actually asking.

8. Use process of elimination

Using the process of elimination is a popular strategy for test-takers. Eliminate the answers you are sure are incorrect and continue through the rest of the answers. This approach can help you increase your accuracy and save you time.

9. Know your mortgage laws/regulations

Understanding mortgage laws and regulations is as important on the NMLS test as it is in the real world. It’s serious business. Disregarding mortgage laws and regulations will not only damage your clients’ financial future but your own as well. Mortgage loan originators are legally and financially held responsible for damages resulting from negligent (or malicious) business practices.

10. Be well-rested

Ideally, you will get between seven and nine hours of sleep the night before taking the NMLS test. This has shown to increase knowledge retention and even help limit anxiety.

NMLS practice test: what percentage of people pass the NMLS on the first try?

As mentioned, passing the NMLS test on the first try is especially difficult. According to NMLS SAFE, the first-time pass rate is 54%. Just 46.7% pass it on subsequent attempts.

NMLS practice test: how do so many people fail the NMLS test?

The main reason so many people fail the NMLS test is they do not study enough, take NMLS practice tests, or pay enough attention during their pre-licensing class. (Although simple panic or test-taking anxiety should be included as well.) It is important to prepare well by following the tips in this article and studying as much as possible.

NMLS practice test: closing thoughts

Before taking the exam and meeting the requirements, it is important to be prepared. Remember: the NMLS is used to maintain licensing information and allow mortgage lenders and clients to check that information for loan officers they work with. It is therefore of the utmost importance that the process of getting your NMLS license runs as smoothly as possible.

If you're truly interested in becoming a mortgage loan officer, take the time to look at the mortgage professionals we highlight in our Best of Mortgage section. Here you will find the top performing mortgage professionals, including mortgage loan officers, across the USA.

Read more: What type of education does a loan officer need?

Have experience taking an NMLS practice test? Let us know in the comment section below.