As a mortgage broker, having a surety bond might appear as a formality in the registration process. However, it is crucial to learn more about surety bonds and what role it plays. Businesses that concisely indicate their bonds guarantee a safe and secure environment during operation. A mortgage broker bond serves as a way of proving that a company is legit. Here are five things you need to know about Mortgage Broker Bond in Phoenix.
What is a mortgage broker bond?
It is a form of permit that serves to protect clients from dishonest or illegal activities. The bond acts as a third-party guarantee between the lender (Principal) and the receiver of the bond (Obligee).It is a mandatory requirement in every state in which the broker operates. Terms relating to the bond may vary in each state. Before getting a license, a mortgage broker is required to apply and obtain a surety bond.
How does it work?
A mortgage broker requires a permit to transact any business. A broker bond acts as a license which is to be obtained before any dealings. Although management of licenses is done by the Nationwide Mortgage Licensing System, each state has its rules and regulations to be met by brokers. This means the mortgage brokers operation in more than one state requires bonds for each one.
How much does it cost?
The cost of bonds varies in each state. The amount is also affected by some factors. These include; experience, credit score, and financial statements. Minimal years of experience and poor financial status will result in a higher price.
Saving on Bonds
It is advisable to choose a surety bond provider carefully. Selecting the top rated and A-listed bond providers is more secure and cheaper. This also guarantees best guidelines on pricing and bonding conditions.
Credit score also dictates on the amount of price to pay. Credit scores below 650 are expected to pay a higher price.
Applying online for a mortgage broker bond in Phoenix streamlines the process. This prevents the hassle of office procedures and saves on time. It also reduces the cost of the bonding process.
Start on a mortgage broker bond in Phoenix process today through an online application at Southwest Bond Services.
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