How to Pass the NMLS Exam and Launch Your Mortgage Career

Hi, I’m Megan Marsh, founder of Co/LAB, and if you’re here it’s probably because you’re ready to break into the mortgage industry. Maybe you want to become a loan officer. Maybe you’re aiming to be a mortgage broker. Or maybe—you’re like me—you’ve got that entrepreneurial itch and you want to start your own mortgage company.

Here’s the straight truth: no matter which path you choose, it all starts with one class and one exam. That’s it.

✅ The 20-hour NMLS Pre-Licensing Course

✅ The NMLS SAFE Mortgage Loan Originator Exam

Pass those two, and you’ve unlocked the door to this entire industry.

But I’m not going to sugarcoat it—the NMLS exam is tough. Almost half of people fail the first time. The good news? If you take it seriously, use the right study strategies, and lean on some of the tips I’m going to share with you today, you can pass on your first try.

Let’s dive in.

Why the NMLS Exam Matters

If you want to originate loans, run a brokerage, or build your own mortgage empire, the NMLS exam is your non-negotiable starting line. Without it, you simply cannot do business.

Think of it like getting your driver’s license. It doesn’t matter whether you want to drive a Honda Civic or an 18-wheeler—the state still makes you pass the same test first.

The NMLS exam is that license. And once you’ve got it, the road ahead opens up.

How Hard Is the NMLS Exam, Really?

I get this question all the time: “Megan, how hard is it really?”

Here’s the honest answer: it’s not impossible, but it is challenging. The first-time pass rate is only 55%. That means almost half of people fail.

Most don’t fail because they’re not smart enough. They fail because they:

• Underestimate the test

• Don’t put in the study time

• Focus too much on loan products instead of federal law

• Cram instead of building a study plan

I’ve taken the test twice (not by choice), and I passed both times. I am NOT a natural test-taker—but with the right prep, it’s doable.

What’s on the NMLS SAFE Mortgage Loan Originator Exam?

The exam has 125 multiple-choice questions (115 count toward your score). You need at least 75% to pass.

Here’s how it’s weighted:

• 25% Federal Mortgage Law – Think RESPA, TILA, ECOA, TRID (lots of memorization)

• 24% General Mortgage Knowledge – Loan programs, processes, terms

• 23% Loan Origination Activities – The daily work of an LO

• 16% Ethics and State Content – Fair lending, compliance, ethical scenarios

• 12% Non-Traditional Products – ARMs, reverse mortgages, evolving products

Pro tip: Don’t spend 80% of your study time on origination activities—it’s only worth 23% of the test. Laws and ethics are just as important.

Step 1: Choose the Right NMLS Course

Not all pre-licensing courses are created equal. You want one that’s built for mortgage professionals, not just a generic cram session. Look for a provider that offers:

• Engaging, easy-to-digest material

• Practice exams and quizzes

• Supplemental resources (videos, flashcards, test simulators)

Some I’ve personally used and recommend:

• Mortgage Educators

• Affinity Real Estate & Mortgage Training Academy

• PrepXL (great exam simulator)

👉 For more resources, check out our Co/LAB training hub where we share recommended courses and tools.

Step 2: Build a Study Plan That Works

Here’s where most people fail—they don’t build a plan.

Instead of cramming, spread your study across 2–3 weeks:

• Week 1–2: Work through the course, take notes, and create flashcards.

• Week 2–3: Drill practice exams, focus on weak areas, and review flashcards daily.

Your goal? Score 85% or higher consistently on practice tests before scheduling your exam.

Step 3: Master the Key Mortgage Laws

If there’s one area you can’t afford to slack on, it’s federal law. These acronyms are going to feel like alphabet soup at first, but once you lock them down, you’re golden:

RESPA – Real Estate Settlement Procedures Act

TILA – Truth in Lending Act

ECOA – Equal Credit Opportunity Act

HMDA – Home Mortgage Disclosure Act

TRID – TILA-RESPA Integrated Disclosure Rule

When you can explain what these laws are, why they exist, and what they regulate—you’re test ready.

Step 4: Use Test-Day Strategies

The exam isn’t just about what you know—it’s about how you take the test. Here are my best strategies:

• Read carefully. They love to sneak in tricky wording.

• Trust your gut. Your first instinct is usually right.

• Eliminate wrong answers. Narrow it down before guessing.

• Mark and review. Don’t waste time stuck on one question.

• Use the full time. Go back and review flagged questions.

What If You Fail the NMLS Exam?

It happens. If you fail, you have to wait 30 days before retaking it. Fail three times in a row, and you’re benched for six months.

That’s why you want to prepare the right way up front.

If you do end up waiting, you can always gain experience as a Loan Officer Assistant (LOA) until you’re able to retest. But ideally, you’ll pass and start building your business right away.

Frequently Asked Questions About the NMLS Exam

1. How much does the NMLS exam cost?

The exam fee is $110, plus the cost of your 20-hour pre-licensing course (usually $250–$400).

2. How long does it take to prepare?

Most people need 2–4 weeks of dedicated study time to be fully ready.

3. Can I take the exam online?

Yes, the NMLS offers both in-person testing centers and online proctored exams.

4. What happens if I pass?

Once you pass, you can apply for sponsorship with a mortgage company like Co/LAB Lending to officially activate your license.

5. Is the NMLS exam the same in every state?

Yes, the national exam is the same everywhere, though some states have additional state-specific requirements.

Final Thoughts from Me

Here’s the bottom line: if you want to be a loan officer, broker, or owner, passing the NMLS exam is step one. Almost half of people fail—but you don’t have to be one of them.

Take it seriously. Build a plan. Master the laws. And practice until you’re hitting 85% or better. Do that, and you’re setting yourself up to pass on the first try.

And when you do? That’s when the fun really begins—building your mortgage career, helping families, and maybe even starting your own company one day.

Ready to Start?

If you’re looking for guidance on licensing, sponsorship, or how to actually grow your business after you pass, we’d love to help.

👉 Schedule a call with our Co/LAB team and let’s talk about how we can help you launch your career.

Megan Marsh
CEO/ FOUNDER of Co/LAB Broker Concierge

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If you’re curious about how we can help you simplify your operations beyond what our videos offer and want to know how you can make launching or running your brokerage stress-free, the link below explains everything. No fluff, no “exclusive training” gimmicks—just a straightforward way to see how we work with brokers to take backend tasks off their plates. Check it out here: https://colablendingfranchise.com/book-a-discovery-call