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How to Pass the NMLS Test on the First Try

How to Pass the NMLS Test on the First Try

by The CE Shop Team

10 Tips for Passing the NMLS Test 

You’ve probably heard that the National Mortgage Licensing System and Registry (NMLS) exam or the national "Mortgage Loan Originator test" is a notoriously difficult exam to pass, and it is. We’re here to tell you, though, that with high-quality education, the right type of practice, and an unwavering sense of perseverance, you can achieve your goal of licensure — just like the thousands of other MLOs, Mortgage Brokers, and Loan Officers who came before you. 

In fact, we’re even willing to bet that you’ll enjoy it. After all, our role as an MLO course provider is built on your success as a lender so we want to help you be as prepared as you can be for both the exam and your bright professional future in the mortgage industry. With that said, here are some top tips to help you pass on your first try: 

1. Complete a High-Quality Mortgage Pre-Licensure Education (PE) Course

The SAFE Act of 2008 mandates that all students complete at least a 20-hour course before taking the NMLS exam and applying for a mortgage license. However, that's just the bare minimum. Many states also require additional education, so whether it’s with us and our thoughtfully-engineered interactive on-the-go learning platform, or another “more traditional” school, the best way to set yourself up for success is always beginning with high-quality PE coursework. Not only will it help prepare you for the exam, but it will also help you be better prepared to help clients secure the mortgage loans they need to make their dreams a reality. 

2. Take an NMLS Exam Prep Course

We’ve all heard “practice makes perfect” but most people agree that it’s much more important to practice perfectly. By investing in an NMLS exam prep course, along with creating other forms of test prep and study materials such as practice exams or flashcards, you’ll have the resources you need to practice more effectively making you more likely to pass the exam on your first attempt.    

3. Understand the NMLS Test Breakdown

Students seeking an MLO license are allotted 190 minutes to take the NMLS exam, which is comprised of 120 multiple-choice questions (115 scored test questions and 5 unscored test questions) covering several different areas including: 

  • Federal Mortgage-Related Laws 24%
  • Uniform State Content 11%
  • General Mortgage Knowledge 20%
  • Mortgage Loan Origination Activities 27%    
  • Ethics 18%

4. Read Each Question Twice 

One strategy that many test takers employ is to read each question twice. Reading each question twice helps ensure that no aspect of the question is missed. Multiple-choice tests are notoriously detail-oriented, so understanding the question completely is a must. 

5. Use Your Test-Taking Time Wisely 

More often than not you will have the ability to revisit questions. That means if you’re unsure about a question, just skip it and revisit it later when you’ve completed most of the exam. With fewer questions remaining, you’ll be able to better manage how much time to spend on each of those remaining questions. 

Did You Know? 

Working in the mortgage industry comes with a lot of responsibility. Mortgage Loan Originators must act ethically, and understand the business for both clients and larger financial systems as a whole. With that said, the NMLS licensing exam is purposely designed to be difficult. Did you know that only 56% of NMLS test takers pass the exam on their first attempt?

6. Answer Every Question

Unlike some other exams, there are no additional penalties for answering incorrectly on the NMLS test. Before completing the exam, make sure every question has been answered to give yourself the best chance of passing. 

7. Watch Out for Negatives

According to the University of Northern Colorado’s test-taking strategies handbook, positive answers are more likely to be correct than negative ones. Also, be on the lookout for questions containing double negatives, as those need to be read carefully. Sometimes it can help to read the question without the negatives to get a better understanding of what the question is asking. 

8. Use the Process of Elimination

Using the process of elimination has long been one of the go-to test-taking strategies. Eliminate the answers you know for a fact aren’t correct, and move on to the remaining answers. This will help you save time and increase your accuracy, especially if you decide to skip the question and revisit it later on. If you're still honing your skills, try it out on practice tests before taking the national test.

Oftentimes, technical or precise answers with more information are generally correct, but if the answer is using language or terms outside of the usual or expected that can be a red flag. Meanwhile, incorrect answers are more likely to contain words such as “always,” “never,” “all,” “none,” and “every.” Of course, this isn’t always the case so read and deduce carefully. 

9. Understand Mortgage Laws & Regulations 

Whether it’s for the exam or for the real world, having a thorough understanding of mortgage laws and regulations is a must. Disregarding mortgage laws can harm your clients’ financial future as well as your own. MLOs, in many cases, can be legally and financially held responsible for damages incurred by negligent or malicious business practices. 

10. Rest the Night Before the NMLS Test

There’s a great deal of scientific evidence suggesting that healthy sleep patterns — meaning regularly getting 7-9 hours of restful sleep (for adults) — will help you retain the information you need come test time, as well as help fend off anxiety. Of course, that applies the night before the exam as well. 

How to Register for the NMLS Test 

Registering for the NMLS licensing exam is simple. Just complete the following step-by-step:

  1. If you haven’t already done so, create an NMLS account.
  2. A test enrollment window must be created and paid for in the NMLS system. Test fees must be paid for on the NMLS site when creating a test enrollment window, not at the test center.
  3. Accept the candidate agreement.
  4. Schedule your exam at a testing center in the NMLS system or by contacting Prometric directly. Tests can be scheduled online by visiting the Prometric website

Note: Don’t forget to bring a current, valid form of identification. 

What Happens If You Fail the NMLS Test?

The national exam has a relatively low pass rate of 56%. If you’re part of the 44% who don’t pass on the first time, that’s quite alright — the test is meant to be challenging and it’s hardly a reason to give up on your future as a Loan Officer. Some of the most successful MLOs in the industry didn’t pass on their first try, or even their second try. Should you wish to retake the exam, you’ll need to pay all fees for each attempt and wait at least 30 days before you can try again. If you fail again, you’ll need to wait another 30 days before trying again. If you fail a third time, you’ll be required to wait at least 180 days before attempting again — then the cycle resets.

In many cases, students find themselves making a few attempts, so don’t be discouraged if you don’t pass on the first, second, or third attempts — keep at it, it’s just part of the game and the rewards are worth it!