Dos & Don'ts — NMLS Exam Preparation Tips For Loan Officers
When the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) was passed in 2008, the mortgage industry was forced to adjust. After August of 2009, anyone who planned to originate mortgage loans needed to pass the NMLS exam to be licensed.
This isn’t the type of test you ace with no effort, and with a glance at the exam outline provided by the NMLS, it’s easy to see why. With 125 detailed multiple-choice questions spread among five content categories, it’s safe to say “winging it” won’t be a recipe for success.
And, it’s a good thing you won’t have to. These study tips for prospective loan officers will help you prepare for the NMLS exam and start your new career in the wholesale mortgage industry.
Research Pre-Licensing Courses Before You Enroll
One of the SAFE Act requirements is that state-licensed mortgage loan officers must complete pre-licensure education. This means you’ll need to complete 20 hours of NMLS approved training, which includes:
Three hours of Federal law and regulations training
Three hours of ethics training that includes instructions on fraud, consumer protection, and fair lending issues
Two hours of training related to lending standards for the non-traditional mortgage product market
Twelve hours of instruction on mortgage origination, the focus of which does not have to be specific to a given topic
While all state-licensed mortgage loan originators are required to complete pre-licensure education, it’s important to note that all pre-licensure courses aren’t created equal. The NMLS offers a list of approved course providers, but you’ll want to do some additional research before you enroll.
Some courses are virtual, some are in-person. Some courses offer direct access to instructors, some don’t. Choosing the course that best matches your schedule and learning style can have a real impact on your experience and results.
Use NMLS Practice Exams Wisely
Practice tests are one of the most effective ways to assess your mortgage knowledge before the big exam. Some online prep courses include practice tests, which can be a helpful tool in identifying your strong points and any areas that could use some extra attention. If you’re unfamiliar with online testing, utilizing NMLS practice exams can help you become more comfortable with the process.
That said, practice tests alone may not get the job done. If you’ve taken multiple-choice exams before, you know it’s possible to answer a question correctly without fully grasping the concept behind that answer or even the question itself. With over 4,000 possible questions on the exam, memorizing questions and answers isn’t realistic. If you understand the concepts behind the questions, and why the right answers are the right answers, you’ll be ready no matter which questions you get.
Don’t Go It Alone
Once the exam starts, it’ll just be you, your pencil (or keyboard), and your mortgage knowledge. Up until that point, use every resource at your disposal to prepare — and that includes your peers. Remember, anyone and everyone who plans to become a loan officer will need to pass the NMLS exam. There will likely be plenty of people in your area who are prepping for the exam at the same time as you.
You can also find NMLS groups on platforms like LinkedIn and Reddit that serve the same purpose. No matter your learning style or personality type, connecting with like-minded peers who are working in the mortgage industry or working toward getting started, can help you study and prepare more effectively, and feel less isolated while you do it.
Get Ready to Take Your NMLS Exam
After all the hard work you put in to build your confidence and prepare for the NMLS exam, you’ll want to take it while all of that knowledge is fresh in your mind. You are likely to feel most prepared for the exam right after your 20-hour pre-licensure course, so capitalize on that momentum and schedule your exam sooner rather than later.
If you need another reason to resist procrastination, you’ll find it in the mortgage industry itself. As you already know — or are soon to find out — the mortgage industry is constantly evolving and changing. If you wait too long, the actual NMLS exam could be different from the one you studied and prepared for.
With these preparation tips and the right pre-exam courses, you’ll have all you need to successfully complete your NMLS exam.
Are you ready to jump-start your career in the mortgage industry? Our team at BeAMortgageBroker.com is here to help you every step of the way.