Mortgage Loan Originator (MLO) Licensing Practice Test

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Prepare for the Mortgage Loan Originator (MLO) Licensing Test. Study with flashcards and multiple-choice questions, each with hints and explanations. Get ready to succeed on your exam!

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How long after the application date must social security payments continue to be received to count as income?

1 year
2 years
3 years
5 years

The correct answer is: 3 years

To classify Social Security payments as income for mortgage qualification purposes, it is essential that the payments are expected to continue for a specific duration. The standard requirement is that these payments must be received consistently for three years from the application date. This timeframe helps lenders establish reliability and stability in a borrower's income, ensuring that the social security payments are a viable source of income for the life of the loan. By requiring a three-year history, lenders can mitigate the risk of income changes and verify that the borrower will be able to make their mortgage payments over an extended period. This time frame is recognized in various underwriting guidelines, making it essential knowledge for mortgage loan originators when assessing a borrower's financial profile.