NMLS MLO Exam With Confidence Using Practice Dumps

Under the TILA-RESPA Integrated Disclosure (TRID) rule, the borrower must receive the Loan Estimate (LE) at least 7 business days before the closing (also called consummation) of the mortgage loan. This rule ensures that the borrower has sufficient time to review and understand the loan terms and costs.

The 7-day waiting period starts from the day the Loan Estimate is delivered or placed in the mail. This period allows the borrower to ask questions and possibly negotiate terms before finalizing the mortgage.

References:

TILA-RESPA Integrated Disclosure Rule (TRID), 12 CFR §1026.19(e)

Consumer Financial Protection Bureau (CFPB) Guidelines

In an Adjustable-Rate Mortgage (ARM), the components that adjust periodically are the index and the interest rate. Here’s how it works:

The index is the benchmark interest rate that fluctuates with market conditions (e.g., LIBOR, SOFR).

The interest rate adjusts based on changes in the index, but the margin (the fixed percentage added to the index) remains constant throughout the life of the loan.

Thus, the index and interest rate are the variables that change periodically, while the margin remains fixed.

References:

Fannie Mae Selling Guide for ARMs

Freddie Mac ARM Guidelines

A salaried W-2 position is an example of non-fluctuating income because the borrower receives a consistent, fixed salary each pay period. This type of income is easy to verify and predict, making it ideal for mortgage qualification.

Other types of fluctuating income:

Self-employed income (B) and commission-based income (C) vary based on the nature of work and can fluctuate month to month.

Part-time work with irregular hours (D) also fluctuates due to varying work hours, making it inconsistent.

References:

Fannie Mae Selling Guide for income verification

Freddie Mac's Loan Product Advisor for employment income documentation