Kentucky Mortgage Broker Bond Requirements
To get a license as a mortgage broker, mortgage company, or loan originator in Kentucky, you need to get a mortgage broker bond.
The bond amounts for these license types are as follows:
- $50,000 mortgage broker bond
- $250,000 mortgage company bond
- $15,000 or $20,000 loan originator bond
The Kentucky Department of Financial Institutions issues, renews, and regulates these licenses. To apply for your license, though, you must apply through the Nationwide Mortgage Licensing System (NMLS).
Once you register in NMLS, you will receive access to the license application forms and will be able to upload your bond and application documents.
Why Do I Need This Bond?
These bonds serve as a guarantee that the licensed party will comply with the provisions of the Kentucky Revised Statutes (KRS) 286.8 as well as any orders by the Commissioner of the Department.
If a licensed broker or originator violates the statutes, causing losses to a borrower or consumer, that person may file a claim against the surety bond. The bond company that backs the bond must then investigate the case and determine whether to extend compensation to claimants.
Compensation extended under a bond claim can be as high as the full penal sum of the bond but not more.
Once a surety compensates claimants, the bonded broker or originator must reimburse the surety in full.
New to surety bonds? See our ‘What is a surety bond’ guide for a detailed overview of how bonds work, and why businesses need them!
See the sections below for more about the cost of this bond, and how to apply!
If you have any questions about the bonding requirements for Kentucky mortgage brokers, call us at 866.450.3412!
What’s The Cost of The Kentucky Mortgage Broker Bond?
The surety bond cost, also known as the bond premium, is a percentage of the total amount of the bond.
In Kentucky, mortgage brokers must post a $50,000 bond. Mortgage companies must post a $250,000 bond.
Loan originators’ bond amount depends on their annual loan volume. Those with less than $10 million volume must submit a $15,000 bond, whereas those with more than $10 million must submit a $20,000 bond.
The rate at which you will be able to get bonded depends on a number of different financial factors. These are as follows.
Factors That Determine Your Bond Premium
The most important factor, determining your bond premium, is your personal credit score. The higher your credit score, the cheaper it will be for you to get bonded. Sureties consider credit score an indicator of financial stability and reliability.
If you have a high credit score, one of 700 FICO or more, you will likely be offered a rate between .75% and 1.5% of the total bond amount.
Applicants with average credit scores are typically bonded at a rate of up to 3%, whereas those with low scores can expect to be bonded at rates upward of 3%.
In addition to your credit score, a surety will typically also request to review one or more of the following items:
- Personal and business financial statements
- Fixed and liquid assets
- Work experience and record
Want to know how much it will cost to get bonded? See the table below for an estimate of your bond premium based on your credit score.
|Kentucky Mortgage Broker Bond Cost Based on Credit Score|
|License type||Bond Amount||Credit Score|
|Above 700||650-699||600-649||Below 599|
|Mortgage loan broker||$50,000||$375-$750||$500-$1,500||$750-$2,000||$1,500-$3,500|
|Mortgage loan company||$250,000||$1,875-$3,750||$2,500-$7,500||$3,750-$10,000||$7,500-$17,500|
|Mortgage loan originator||$15,000||$113-$225||$150-$450||$225-$600||$450-$1,050|
Wondering how much your bond will cost? Complete our online application form and get a free quote for your bond. It takes a few minutes and there is no obligation.
How to Get a Mortgage Broker Bond in Kentucky
To apply for a mortgage broker bond, simply click on the banner below and complete the brief form. We will then issue a free quote on your bond and provide you with more information about the bonding process.
Do you have any additional questions about getting this bond? Call us at 866.450.3412 to speak to our surety professionals.