Is the NMLS SAFE Exam Really That Hard?

mortgage loan originator at a desk taking a test

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If you’re considering a career in the mortgage industry, you’ve probably heard about the National Mortgage Licensing System and Registry (NMLS) and the SAFE Mortgage Loan Originator Test. The test is designed to ensure that mortgage loan originators have the knowledge and skills necessary to do their job effectively and ethically. But is the NMLS SAFE Exam really that hard?

The answer to whether the NMLS SAFE Exam is as difficult as people say is not a simple yes or no. The difficulty of the exam can vary depending on your background, experience, and study habits. Statistically, it does prove to be challenging. One of our team members passed the NMLS SAFE Exam on her first try, but according to the NMLS, the pass rate for the national component of the exam is 57% as of December 2022. And, unfortunately, subsequent attempts have an even lower pass rate. This means that many people struggle to pass the exam not just on their first try but at all. 

That being said, passing the exam is not impossible. In this article, we’ll explore the format of the NMLS SAFE Exam, what to expect on test day, and tips for studying and preparing for the exam. By the end of this article, you’ll have a better understanding of what it takes to pass the NMLS SAFE Exam and whether it’s the right career path for you.

Key Takeaways

  • The NMLS SAFE Exam is notoriously difficult. 
  • How you do on the NMLS SAFE Exam depends on a number of factors including your preparation before the test and how you handle the test on the day of the exam. 
  • Just because the exam is difficult doesn’t mean it is impossible. 

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How is the NMLS SAFE Exam structured?

If you’re planning to become a Mortgage Loan Originator (MLO), you’ll need to pass the Nationwide Mortgage Licensing System and Registry (NMLS) SAFE Exam. This exam is designed to ensure that MLOs have a minimum level of knowledge and competence in the mortgage industry to protect consumers.

The NMLS SAFE Exam consists of 125 multiple-choice questions of which 115 are scored, and the remaining ten are unscored. Previous versions have instead included 100 exam questions and 10 practice questions. The exam must be completed within 190 minutes, but most test-takers finish it in around two hours. The cost to take the exam is $110 and this fee must be paid with each subsequent re-test, if necessary. This is something to keep in mind about the cost of an NMLS license

The exam is divided into two sections: the National Component and the State Component. The National Component covers federal mortgage-related laws and regulations, while the State Component covers state-specific laws and regulations. The number of questions for each section varies depending on the state you’re applying for.

The passing score for the NMLS SAFE Exam is 75%, which means you typically need to get at least 90 of the 115 scored questions correct. However, some states may require a higher passing score. 

Difficulty of the NMLS SAFE Exam

The difficulty of the NMLS SAFE Exam is relative to many factors including your background. It is easier than tests required in some industries but harder than the tests required in others. 

Comparative Analysis

When compared to other professional exams, such as the bar exam or the CPA exam, the NMLS SAFE Exam is generally considered to be less difficult. In some states, like Nebraska, the passing rate for the bar exam is even lower than the NMLS success rate at 41%. 

Test Difficulty is Subjective 

The difficulty of the NMLS SAFE Exam is often subjective and depends on the individual test-taker’s level of preparation and experience in the mortgage industry. Some test-takers find the exam to be relatively easy, while others may struggle to pass.

To prepare for the exam, it is recommended that you take a pre-licensing course and study the exam content outline provided by the NMLS. Additionally, many test-takers find it helpful to take practice exams and review study materials from reputable sources.

While the NMLS SAFE Exam may not be the most difficult professional exam, it is still important to take the exam seriously and prepare thoroughly. Passing the exam is a requirement for obtaining a mortgage loan originator license, and failure to pass the exam can result in delays in obtaining your license or even the loss of your job. There is a 30-day waiting period between examinations if you fail on your first or second attempt. If you fail on your third attempt, you must wait 180 days before you can try again. This is costly both financially and in terms of time. 

Test-Taking Strategies

When it comes to the NMLS SAFE exam, it’s not just about what you know, but also how you take the test. Here are some test-taking strategies that can help you improve your chances of passing the exam on your first attempt:

Study and Prepare

Before the exam, make sure you have thoroughly studied all the material. Use high-quality study materials, such as a pre-licensing course, and practice questions to help you prepare. Take breaks, stay hydrated, and get enough sleep to ensure you are mentally prepared for the exam.

Manage Your Time

The NMLS SAFE exam is timed, so it’s important to manage your time effectively. You have just over three hours to take the test. Don’t spend too much time on any one question. If you get stuck on a question, mark it and move on. You can always come back to it later.

Watch Out for Trick Questions

Read each question carefully and make sure you understand what it’s asking. Pay attention to key terms and phrases, and look for clues within the question that can help you determine the correct answer. Don’t make assumptions or jump to conclusions.

Eliminate Wrong Answers

If you’re not sure of the answer, try to eliminate any obviously wrong answers. This can help you narrow down your choices and improve your chances of getting the question right. Look for answers that are clearly incorrect or don’t make sense.

Answer Every Question

If you’re running out of time and still have unanswered questions, don’t leave them blank. Make an educated guess, even if you’re not sure of the answer. You won’t be penalized for guessing, and you might just get lucky and choose the right answer. A blank question has a 0% success rate, while answering gets you at least a 25% shot at getting it right. 

Common Challenges and How to Overcome Them

Understanding Complex Concepts

One of the biggest challenges of the NMLS SAFE Exam is understanding complex concepts. The exam is designed to ensure that mortgage loan officers (MLOs) have a thorough understanding of the financial responsibilities associated with their job. Some of the concepts covered in the exam can be difficult to grasp, even for those who have been working in the industry for years.

To overcome this challenge, it is important to study the exam material thoroughly. Make sure you understand the concepts and can apply them in real-world scenarios. Take practice tests to identify areas where you need more work, and focus your study efforts on those areas.

Dealing with Exam Anxiety

Another common challenge of the NMLS SAFE Exam is dealing with exam anxiety. It is normal to feel nervous before taking an exam, but excessive anxiety can interfere with your ability to perform well.

To overcome this challenge, try to stay calm and focused during the exam. Take deep breaths, and remind yourself that you have studied hard and are well-prepared. If you feel yourself getting overwhelmed, take a break and stretch your legs.

It is also important to get a good night’s sleep before the exam and to eat a healthy breakfast. Being well-rested and well-fed can help you stay alert and focused during the exam.

You Can Pass the NMLS SAFE Exam

Passing the NMLS SAFE Exam is not easy, but it is definitely achievable with proper preparation and dedication. The exam is designed to test your knowledge of federal and state mortgage laws, ethics, and lending practices. Like mortgage regulations and compliance, the test is constantly being updated so it is crucial to stay up to date with the latest developments in the industry.

To increase your chances of passing the NMLS SAFE Exam, consider using study materials, such as SAFE MLO and Prep xL, which have been recommended by other test-takers on Reddit. Additionally, taking practice exams and consistently scoring in the 90s is a good indicator that you are ready to take the actual exam.

If you do fail the exam, don’t be discouraged. This industry will test your grit and patience at times, but it is also a fulfilling career path. Learning to pivot and adapt will serve you well in the long run and in any market conditions. 

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