Nationwide Mortgage Licensing System (NMLS) Practice Exam

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Prepare for the Nationwide Mortgage Licensing System (NMLS) Exam. Utilize flashcards and multiple choice questions, each with hints and explanations. Ensure your success by getting thoroughly prepared!

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A loan closes on May 14. When is the first mortgage payment due?

May 15
June 1
June 15
July 1

The correct answer is: July 1

The first mortgage payment is typically due on the first day of the month following the closing of the loan. In this case, since the loan closes on May 14, the first mortgage payment would not be due in the same month of May. Instead, it would be due on July 1. This structure is standard because mortgage payments are generally applied to the interest accrued from the previous month. Hence, for a loan closing in mid-May, the borrower would not have to make a payment until the beginning of July, allowing time for the lender to assess the interest and for the borrower to adjust to the new loan. Understanding this timing is crucial because it affects budgeting and cash flow for the borrower. Knowing the payment schedule helps in planning ahead and avoiding any potential late payment issues.