In the state of Arizona, as it is in virtually every other state, in order to become an official broker, an individual will need a state issued mortgage broker license. Also, to qualify for this sort of license, they will need a mortgage broker bond in Arizona.
How Big of a Bond Will Be Needed
For those that aren’t aware of what a mortgage broker bond is, it is basically a guarantee that a broker is legitimate and legally allowed to operate in the state of Arizona as a mortgage broker. Arizona requires institutional brokers secure a $10,000 bond and non-institutional brokers are required to have a $15,000 bond.
A Legal Guarantee
The reason’s for having to secure a bond is a matter between the broker and the governing body of mortgage brokers in the state of Arizona. In essence, a bond is a guarantee that the mortgage broker will do their job to the best of their ability and adhere to all rules, regulations and ethical practices set forth in Arizona state law.
How Much Will It Cost
For individuals looking to get a mortgage license, especially those not affiliated with a lending institution, the cost for the bond will not be the full amount of the bond. In most cases, a bond will require an initial payment of anywhere from 1 percent to 4 percent of the total bond. This number could be higher if the individual’s credit score is low.
In addition to an initial payment, each bond provider will charge monthly fees, much like premiums paid to an insurance company. While this policy isn’t exactly an insurance policy, from a standpoint of monthly payments, it is quite similar.
A Savvy Marketing Tool
Lastly, even though it is legally required to have a surety bond to do business as a mortgage broker in Arizona, it can be a good way to drive business to a mortgage broker. Since the bond makes a broker legitimate and people like legitimacy, advertising something as basic as a mortgage broker being bonded can be a powerful marketing tool.
There are many facets to a mortgage broker bond in Arizona. That’s why, if your license needs to be renewed or you’re thinking about becoming a mortgage broker, Southwest Bond Services may be of particular interest to you.
