How Hard is the SAFE MLO Exam?

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Like many careers, getting into the mortgage industry requires proving your knowledge and understanding through an examination—in this case, in order to become a mortgage loan originator, you need to pass the SAFE MLO Exam to properly state giving out mortgage loans and other deals to various people who need a new home.

But how exactly hard is the SAFE MLO Exam? What can you do to pass it? We can answer those questions easily–unfortunately, we cannot say the same for the SAFE MLO Exam.

What is the SAFE MLO Exam?What is the SAFE MLO Exam?

The National Mortgage Licensing System & Registry SAFE Act Mortgage Loan Originator Exam, or the SAFE MLO Exam, is your largest obstacle in becoming a mortgage loan originator.

If you don’t know already—and it would be pretty worrying if you don’t! —a mortgage loan originator helps give prospective borrowers manage a mortgage within their means. Being a mortgage loan originator is an important job. It’s not being the President of the United States or being a scientist finding the cure for cancer, but you will be responsible for ensuring that another person makes the best business decision possible. The federal government surely agrees, which is why you must complete the SAFE MLO Exam if you want to be an MLO yourself.

The SAFE MLO Exam is a comprehensive examination of your understanding of mortgaging, the housing industry, how to give and receive loans to and from people, and the various laws, rules, and conduct involved.

If you are here, reading our article, then you must have a good idea of why you need to pass the SAFE MLO. The better question is, how hard is it to pass the exam, and what can you do to ensure you can?

Is the SAFE MLO Exam Really Hard to Pass?

Is the SAFE MLO Exam Really Hard to Pass?

Let’s not beat around the bush—passing the SAFE MLO Exam will be extremely difficult, especially if you are unprepared for it. To pass the exam, you must have a keen, hands-on understanding of the subject matter. Taking this exam with anything less than the utmost seriousness will be a guaranteed failure on your part.

Your chances of winning are already not good. The average passing rate for first-time test takers for the SAFE MLO Exam is 53% – 54%, or slightly over half of the testing base. It does not get any easier for the subsequent attempts, as the average score for a test taker’s second attempt is even lower.

One question that is at the forefront of your mind right now is, “how can I pass the difficult SAFE MLO Exam?” Before we can get into how you can pass the SAFE MLO Exam, we need to give you a clear understanding of what the exam is like. It is not particularly easy to imagine or describe, but we will help you be able to do both and, in turn, prepare yourself for one of the most difficult exams you have ever done in your life.

What is the SAFE MLO Exam Like?

What is the SAFE MLO Exam Like?

We have already demonstrated the basic ideas behind what field the SAFE MLO Exam is gatekeeping examinees behind and why the NMLS would require such a difficult exam to weed out the unqualified.

The SAFE MLO Exam is, functionally, not very different from any other exam. Taking the exam will have to be on pen and paper. Here, we will outline what exactly doing the SAFE MLO Exam will be like.

Length of the SAFE MLO Exam

The complete form of the SAFE MLO Exam is the National Test with Uniform State Content, which refers to the national standard of the SAFE MLO Exam. The National Test consists of 125 multiple choice questions. Completing the test will take up to two hours, but if length bothers you, and not passing the exam does not, then you could always finish it quickly.

Keep in mind that only 115 questions on the National Test are scored, meaning they are the only questions that count towards your final grade. The remaining ten questions are unscored–they are known as pretest questions. These questions do not affect your final exam score and can be lower than ten unscored questions.

While this does mean you have a bit of leeway into how many questions you can get wrong, the test is designed so that the unscored questions are indistinguishable from the scored questions and share the same content area and structure. In other words, if you expect to rely on the unscored questions for some free space, we would not recommend it.

Structure of SAFE MLO Exam

The SAFE MLO Exam is split into five distinct “content areas.” Each area governs a specific percentage of the test, with some types of questions weighing more than the others.

Federal Mortgage Related Laws comprise of 24% of the test questions. This subject deals with the laws installed around federal mortgage, which includes:

  • the Real Estate Settlement Procedures Act (RESPA), which requires that lenders and mortgage brokers disclose real estate transactions and related business decisions to borrowers,
  • the Equal Credit Opportunity Act (ECOA), which prohibits discrimination in terms of race, religion, origin, sex, and age,
  • and the Truth in Lending Act (TILA), which protects customers from inaccurate and unfair billing and credit card practices. All very important for a mortgage loan originator to know and follow!

Uniform State Content is the smallest exam portion (only 11%). The questions are no less difficult, however, as they deal with higher-level state rules and knowledge, including individual license laws and regulations that decide what kind of person is eligible to be an MLO (something very important for anyone who wants to be one!).

General Mortgage Knowledge is 20% of the test and includes subjects and knowledge of the general mortgage industry, including the terms used in the industry—“subordinate loans,” “discount points,” “conveyance,” “assumable loan”—and the various existing mortgage programs, both qualified and non-qualified.

The questions on Mortgage Loan Origination Activities make up the highest percentage of the test, consisting of a whopping 27%. These questions ask you what you know about the requirements and processes for various MLO activities, such as appraisals, title reports, loan inquiries, and how to calculate finances.

Finally, there are the Ethics questions, which consist of 18% of the exam. The Ethics questions examinates your knowledge and understanding of what a Mortgage Loan Originator is and is not supposed to do in terms of interacting with potential clients, handling their affairs, and tempering your actions.

Scores to Pass the SAFE MLO Exam

To pass the SAFE MLO Exam and obtain a legitimate license, you need a passing score of at least 75. For reference, that is higher than many other licensing exams of the same design. Getting a 75 or higher on the exam is a task that is much, much easier said than done. The SAFE MLO Exam will require a lot from you, and you are expected to give a lot back.

How to Pass the SAFE MLO Exam: 3 Tips

How to Pass the SAFE MLO Exam: 3 Tips

If you are still here, then thankfully, that means we didn’t scare you off with this article about how difficult this exam will be. To pass the SAFE MLO Exam, you must commit firmly to a strict study regimen designed to maximize retaining and understanding of the material so that when you sit down and mark down answers, you know what you’re doing. That must mean you are dedicated to overcoming this obstacle. That motivation is only part of your chances of success.

Thankfully, we have three key tips to help you get into the test-taking mood. Be forewarned that the most important thing about studying is how much you can do it yourself, but we will give you precisely what you need to ultimately achieve such a goal.

Get Educated

Some states grant you education courses on the subject, putting you through the wringer to teach you everything there is to know about not only the SAFE MLO Exam but how to be a proper mortgage loan originator and deserving of the license.

NMLS pre-license education courses vary between states. Georgia, for example, requires that before you even take the exam and get your license, you need twenty hours of pre-license education, which includes:

  • three hours of Federal Law,
  • three Ethics hours,
  • two non-traditional mortgage lending hours of education,
  • and finally, twelve hours in elective education, distinct from the hours mentioned above.

Signing up for proper pre-license education is relatively expensive, costing an average of $300 – $400 for the entire twenty-hour course. If you have not already pursued these courses, then this is a good time to buckle down and absorb the knowledge so that you don’t end up behind. Think of it as a long exam prep, which will help you pass it.

Make a Study Schedule

When you have crafted your study schedule, you will expertly recall what you need to pass the SAFE MLO Exam instead of fretting over a specific piece of knowledge or understanding when you get to that point. The actual studying part of studying is only a small part of the studying process. What is more important than getting the knowledge is creating a schedule and routine that will force you to understand what you are reading far beyond mere rote memorization.

Your study schedule should emphasize the repetition of studying—you should buckle down and settle on the amount of time you will be studying, how long you will study at that time, and for how many days. If you need time off for anything that might happen in your daily life, your schedule should account for that.

Practice on Practice Tests

Finally, when you think you have accumulated enough knowledge of the mortgage industry, you should test that hypothesis by taking practice tests and SAFE MLO Exam preps. These practice fields are designed for you to hone your skills.

SAFE MLO practice tests are found everywhere online. For a fee, your state will offer a dedicated test prep guide to help you test your knowledge as needed. The questions are not designed to be the actual questions on the final exam, but you can get a feel for how you should answer those questions.

Wrapping Things Up: How Hard is the SAFE MLO Exam?

To make a long story short, the SAFE MLO Exam will not be easy. You will have to put an excruciating amount of time and effort into understanding the basics and advanced mortgage industry knowledge if you are truly determined to become a Mortgage Loan Originator. We can’t call it rocket science, but it is still not a career you can take lightly.

Hopefully, this article has taught you much about the SAFE MLO Exam, more than enough to create a future test taker ready to tackle one of the most difficult exams out there—or at least one that knows when to move on! So good luck out there, you future MLO!

Picture of Professor Conquer
Professor Conquer

Professor Conquer started Conquer Your Exam in 2018 to help students feel more confident and better prepared for their tough tests. Prof excelled in high school, graduating top of his class and receiving admissions into several Ivy League and top 15 schools. He has helped many students through the years tutoring and mentoring K-12, consulting seniors through the college admissions process, and writing extensive how-to guides for school.

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