Indiana Mortgage Broker Bonds Explained
If you want to launch a mortgage brokerage in Indiana, you have to undergo a state licensing procedure. It involves providing a mortgage broker bond.
As other surety bonds, this bond ensures that you will follow the law in your operations as a mortgage professional. It functions as a safety mechanism for the state and for your customers.
The bond represents a contract between three entities. Your mortgage brokering business is the principal, the Indiana Securities Division is the obligee, and the surety is the bond provider.
Questions about Mortgage Broker Bonds in Indiana
Who has to obtain this bond?
The Indiana Securities Division requires anyone who wants to get an Indiana mortgage broker license to post a surety bond between $50,000 and $75,000. The Nationwide Multistate Licensing System & Registry (NMLS) handles the actual licensing process. The bond ensures you will follow applicable state legislation, including the Indiana Loan Broker Act.
How much should I pay to get bonded?
The price that you have to pay to get bonded is based on the bond amount that you have to provide. That will range between $50,000 and $75,000 and is based on your yearly loan volume. You will only have to pay a percentage of it out of pocket, which is called the bond premium. If your finances are stable, you can expect rates between 1% and 5%.
|Indiana mortgage broker bond amount|
|Yearly business volume||Bond amount required|
|Below $5 million||$50,000|
|Between $5 million and $20 million||$60,000|
|Above $20 million||$75,000|
What factors determine your surety bond cost? The surety that you apply with has to examine your personal credit score, business finances, and assets and liquidity that you may have. By analyzing these indicators, it can assess the level of the bonding risk involved. The more stable your finances are, the smaller your bond premium is likely to be.
|Indiana Mortgage Broker Bond Cost Based on Credit Score|
|Mortgage broker bonds based on yearly business volume||Bond amount||Credit Score|
|Indiana mortgage broker bond||$25,000||Above 700||Between 650-699||Between 600-649||Below 599|
|Below $5 million||$50,000||$250-$625||$375-$750||$1,000-$2,500||$2,500-$5,000|
|Between $5 million and $20 million||$60,000||$300-$750||$450-$900||$1,200-$3,000||$3,000-$6,000|
|Above $20 million||$75,000||$375-$937.5||$562.5-$1,125||$1,500-$3,750||$3,750-$7,500|
Can I get bonded with bad credit?
It may be difficult to get bonded with problematic financials, but it's possible with Lance Surety Bonds. We operate our Bad Credit Surety Bonds program for applicants with financial issues such as a low credit score, tax liens, bankruptcies, and civil judgements.
The rates are slightly higher due to the increased bonding risk - between 5%-10%. But, as we work with numerous A-rated and T-listed surety companies, we are still able to offer you a top bonding option that fits your needs.
How do I obtain this bond?
To obtain your Indiana mortgage broker bond, follow these steps:
Get you free, no-obligation quote
If you're happy with it, you can purchase the bond online right away
We will then send you a digital and a hard copy of your bond
Wondering how exactly the bonding process works? Don't hesitate to visit our How to Get Bonded page.
For any further information you may need, we are here to help. Just contact us at (877) 514-5146 to speak to one of our bonding experts directly.
What happens if I receive a surety bond claim?
You may end up with a claim against your bond if you fail to follow the law. That's how parties who have suffered damages due to your illegal actions can demand compensation.
The claimants can seek reimbursement up to the penal sum of your bond. Initially, your surety may step in to cover the costs on proven claims. However, you are liable to repay it fully, as per the bond indemnity language. On this account, it's best to avoid situations that can give rise to any claims.