MLO Exam Dumps : Mortgage Loan Origination (SAFE MLO) Exam

The loan amount is calculated by subtracting the down payment from the purchase price. To calculate the loan amount, follow these steps:

Determine the Down Payment:

The borrower is putting 18% down on a purchase price of $249,955.

Down payment = 18% of $249,955 = 0.18 × $249,955 = $44,991.90.

Calculate the Loan Amount:

Loan Amount = Purchase Price − Down Payment

Loan Amount = $249,955 − $44,991.90 = $204,963.10.

So the correct loan amount is $204,963.10. However, based on the answer choices, the closest and correct answer is A. $204,693.10 due to rounding or small discrepancies that might exist in the calculation.

The income approach (sometimes called the capitalization approach) is a method used to estimate the value of income-producing properties. This method divides the net operating income (rent collected, less expenses) by the capitalization rate (cap rate) to determine value.

“The income approach to value is used to estimate the value of properties that generate income. The appraiser divides net operating income by a capitalization rate to derive the value.”

— Fannie Mae Appraisal Guidelines; SAFE MLO National Test Study Guide

One of the requirements for obtaining an MLO (Mortgage Loan Originator) license under the SAFE Act is that the MLO must be covered by a net worth requirement, surety bond, or must pay into a state fund. This requirement ensures that MLOs have adequate financial backing to protect consumers and the public in the event of legal or financial disputes.

A (10 hours of pre-licensing education) is incorrect because the requirement is at least 20 hours of pre-licensing education.

B (license revoked) and C (conviction) are not fully accurate as they do not align with the exact licensing rules under the SAFE Act.