The Four Strategies for NMLS Exam Success

pass the NMLS exam tips image

With absolute certainty, the NMLS Exam is passable.  But there’s a definite reason why only slightly more than half of those desiring to pass it are ever able to do so.  Recently-issued NMLS statistics confirm that between October 1, 2019 and September 30, 2021, the overall NMLS Exam failure rate was 48%.  So why are so many people, whose careers and livelihood depend on their passing this exam, never able to do so?

The primary reason for the overall low pass rate has to do with the 20-hour pre-licensing course.  The 20-hour pre-licensing course is the mandatory educational prerequisite to securing one’s MLO license.  This course, by nature, requires the effective delivery of approximately 150 hours’ worth of material in a 20-hour timeframe.  Even the most competent education provider is unable to effectively deliver 150 hours’ worth of material in a 20-hour timeframe; it’s simply not possible.  As such, even the best of the best are forced to skim over the surface of less than half of what is needed to be learned in order to pass the NMLS Exam.  Successful test candidates understand the importance of self-preparation way above-and-beyond completing the 20-hour pre-licensing course.  This is why sitting for the exam shortly after completing one’s 20-hour course is rarely a promising idea.  It typically requires weeks of dedicated post-20-hour-course study, to achieve exam readiness.

Successful NMLS Exam preparation involves four distinct strategies:

  1. Knowledge
  2. Understanding
  3. Practice Exam Proficiency
  4. Strategy


There’s no way around it, no shortcut through it, and no corner that may be cut.  Plainly and simply, there is an enormous amount of material that the successful test candidate must know in order to pass the NMLS Exam.  And this is how it certainly should be.  Afterall, mortgage loan originators are financing peoples’ homes.  That is an exceptionally significant responsibility and one that should never be taken lightly.

The NMLS Test Content Outline is the foundation to the NMLS Exam candidate’s success.   This Test Content Outline is the publicly-available outline used by the State Regulatory Registry (SRR) to create the NMLS Exam.  The Test Content Outline is available through the NMLS’ website, but quality 20-hour course providers provide it to their students as part of their/ 20-hour course offering.  The Test Content Outline contains seven pages of material on which the test candidate may  be evaluated and it’s critical that the NMLS test candidate uses this outline to become versed in everything appearing on it.  The Content Outline’s last two pages provide additional study resources to assist the test candidate in their exam preparation.  The proper use of the NMLS Test Content Outline consists of the test candidate starting from the top and working his or her way down, item by item by item.  After learning one topic, he or she moves down to the next item and progresses in this manner to the Content Outline’s end.  Once the test candidate is thoroughly familiar with everything appearing on the Test Content Outline plus the four regulations that the Test Content Outline neglects to reference (HERA, CRA, FHA, and MARS), the test candidate is a quarter of the way to exam readiness.


By itself, possessing the necessary knowledge is inadequate.  There’s an important distinction between knowledge and understanding.  And understanding is the key.  To demonstrate one’s proficiency with the material covered through the Test Content Outline, successful NMLS Exam candidates are able to articulately discuss the assorted topics and line items appearing throughout the Test Content Outline.  Consider joining study groups found through social media and other avenues.  Participate in discussions with your study mates and industry professionals about the outline’s referenced topics.  As your ability to articulate the diverse topics increases, so will your level of confidence surrounding test readiness.

Practice Exam Proficiency

The third litmus test of exam readiness appears once the test candidate is consistently able to score in the mid-to-high 90’s on quality practice exams.  Even though a grade of 75% is all that is needed to pass the actual NMLS Eexam, consistently scoring less than 93% – 98% on quality practice exams is indicative of the need for additional test preparation.

It’s equally important to emphasize that practice exams should never be used as one’s sole and primary means of preparing for this exam.  No practice exam may replicate an actual NMLS Exam question.  This is why people who prepare for the NMLS Exam by only taking practice exams critically sell themselves short.  By only taking practice exams, test candidates simply memorize the questions and answers that they encounter, rarely understanding the meanings behind those questions.  When they sit for the actual exam, their confidence is shattered when they fail it miserably because they’re far from prepared to answer the questions that they’re actually presented.  This is why consistent performance in the mid-to-high 90’s on quality practice exams is a critical component to NMLS test preparation.  And be certain to thoroughly understand the explanations behind all incorrectly-answered questions. 

When researching where to acquire quality practice exams, conduct your due diligence.  There are many exam preparation providers offering outdated and inaccurate practice exams because they’re not strictly regulated and care about little else than taking your money.  Read the provider’s reviews.  Ask other peoples’ opinions.  Or save yourself the trouble by procuring exceptional and reasonably-priced practice exams, in timed and untimed mode, through


There’s no mixing words … The NMLS Exam is tricky.  The SRR strives to demonstrate that they didn’t let just anyone into the mortgage industry.  Those who got in earned their way in.  And to accomplish this, they make the exam complicated in several ways.

Possessing all of the knowledge and understanding of the material on which the test candidate may be evaluated is not enough to guaranty their passing the NMLS Exam.  Successful test candidates must also be prepared to field curveballs such as questions appearing to have no correct answer (five of the 120 questions with which the test taker is presented are “test-test” questions that neither count for nor against the test taker’s grade).  Test talers should be prepared to encounter questions appearing to have multiple correct answers.  Many of the questions will also contain double, triple, and quadruple negatives clouding what the question is actually asking.  And the test candidate can expect to encounter questions chocked full of extraneous and irrelevant information that is not applicable when identifying the actual answer.  Registering for an upcoming session of the NMLS exam prep webinar, “Maximizing Your Success” here will provide you with an effective means of mastering the strategies necessary for successful NMLS Exam navigation.

I’m frequently asked how long a test candidate needs to prepare for this exam.  The truth is, there is no way that anyone could ever answer that question.  People learn at different paces and in different capacities.  Everyone’s test-preparation experience is unique to them.  There is no cookie-cutter answer to how much preparation constitutes adequate preparation time.  The bottom line is that when the NMLS test candidate is thoroughly familiar with everything appearing on the NMLS Test Content Outline (plus the four other aforementioned regulations), is able to articulately discuss the topics appearing on that outline, is consistently scoring in the mid-to-high 90’s on quality practice exams, and is thoroughly familiar with the strategies necessary for navigating through the exam’s tricky nature that is a promising indication of the exam candidate’s readiness.


Connect With Us

8:00am – 6:30pm EST


Get Social