PennyMac Mortgage Review for 2022

PennyMac is a top nationwide mortgage lender with a track record of low rates. But is it right for you?

PennyMac
Minimum down payment3%
Minimum credit score620
Loan Products Offered

Conventional mortgages
Jumbo mortgages
FHA, VA, and USDA loans
Investment property loans

Best Features

  • Offers conventional loans and government-backed loans
  • Investment property mortgage options
  • Flex-term mortgage option when refinancing your home

Drawbacks

  • No home equity loans or HELOCs
  • Higher credit score requirements for FHA and VA loans

Overview

Founded in 2008, PennyMac Loan Services LLC is a top nationwide lender with a reputation for low interest rates on average.

Whether you’re thinking about purchasing or refinancing, PennyMac offers a wide selection of loan programs.

You can choose between a conventional loan or a government loan, and there’s even a mortgage option if you’re an investor seeking funds to buy an investment property.

But while PennyMac offers competitive rates and its mortgages are available in all states, the lender does require higher credit scores than some.


PennyMac mortgage rates

PennyMac is transparent about its mortgage interest rates and publishes rate information directly on its website. If you’re looking for ballpark numbers, you can find average rates for conventional, FHA, and VA mortgages with loan terms from 15-30 years. Homeowners can compare refinance rates, too.

Keep in mind that many factors decide your actual rate, like your credit score and the size of your down payment. So you’ll need to speak with a loan advisor for a custom rate estimate. You’ll also want quotes from at least two other lenders so you can make a side-by-side cost comparison of lender fees and closing costs.

Average mortgage rates at major lenders

PennyMacRocket MortgageWells FargoFreedom Mortgage
Avg 30-Yr Interest Rate, 202112.87%3.00%3.14%2.66%
Median Total Loan Costs, 20211$5,870$4,670$3,600$3,880
Median Origination Fee, 20211$1,520$2,430$1,330$0

Average rate and fee data were sourced from public rate and fee records required by the Home Mortgage Disclosure Act (HMDA).

In 2021 (the latest data available), PennyMac mortgage rates and fees were competitive with other major lenders. But rates have changed since then — and your own rate could be higher or lower than average.

PennyMac mortgage review for 2022

One of PennyMac’s best features is that it offers a variety of customizable mortgage programs.

There are standard conventional and government-backed loans for home buyers. If you’re refinancing a home, you can also select a “flex-term mortgage” and choose a specific payoff date. This could help you save money on interest while keeping your monthly payments at a comfortable level. And if you’re an investor, you can apply for either a fixed-rate or adjustable-rate investment property mortgage and build your real estate portfolio.

PennyMac is also flexible with regard to repayment terms. While some lenders might only offer 15-year or 30-year fixed-rate mortgages, PennyMac gives the option of a 20-year loan term, too.

But even though PennyMac has a good selection, the lender doesn’t offer home equity loans or home equity lines of credit (HELOCs). So if you’re looking to pull cash from your home, refinancing is your only alternative.

Working with PennyMac

The PennyMac website offers useful online tools that can help borrowers make informed decisions, such as:

  • Affordability calculators
  • Mortgage learning center
  • Home value estimator
  • Real estate concierge services

When you’re ready to buy or refinance, your first step is to get preapproved online. PennyMac makes the application process easy and convenient. Through its online Mortgage Access Center, you can get a rate quote, complete a home loan application, request your credit score, import bank statements, and securely upload your documents.

You can also access digital W-2s from your employer, and the lender uses a two-step verification system to keep your sensitive information safe.

PennyMac customer service reviews

PennyMac receives 4 out of 5 stars in customer reviews on LendingTree and Zillow. Several borrowers praised the company for its low-cost service, knowledgeable and professional advisers, and smooth process. The lender’s website also boasts more than 80,000 reviews from satisfied customers.

Customer service reviews at major lenders

CFPB Complaints, 20214Complaints Per 1,000 Mortgages, 20215J.D. Power Satisfaction Score, 20216
PennyMac1170.20827/1,000
Rocket Mortgage3760.24876/1,000
Wells Fargo4880.58832/1,000
Freedom Mortgage2620.35829/1,000

However, PennyMac also received negative reviews from a small percentage of borrowers, with the majority of these complaints related to closing delays and disorganization. The lender also ranked below than the industry average in J.D. Power’s 2021 Mortgage Satisfaction Study. Though, many of its competitors also fell short of this threshold.

Nonetheless, PennyMac has fewer than one customer complaint per 1,000 mortgages as reported by the Consumer Financial Protection Bureau (CFPB).

Mortgage loan options at PennyMac

PennyMac offers a broad selection of mortgage products. Most buyers will likely find a home loan program to suit their needs.

  • Conventional mortgages: A loan conforming to guidelines set by Freddie Mac and Fannie Mae. First-time home buyers can qualify with as little as 3% down payment and 620 minimum credit score. You can usually stop paying private mortgage insurance (PMI) after a few years
  • Jumbo loans: Higher loan amounts than conforming mortgages, generally for mortgages over $
  • FHA loans: You can put down as little as 3.5% of the home purchase price. But you’ll have to pay mortgage insurance premiums (MIP) each month until you sell or refinance. PennyMac’s minimum credit score is 620, which is higher than most
  • VA loans: Ideal for veterans, active-duty service members, and others who are eligible. Zero down payment, easier credit, competitive rates, and no mortgage insurance. A 620 score is needed
  • USDA loans: A zero-down mortgage loan for home buyers in eligible rural areas. This loan requires a minimum credit score of 640
  • Investment property loans: Use this loan to purchase an investment property. You’ll need a minimum down payment of 15% for a single-family home, and 25% for a two- to four-unit property. According to a lender representative, there’s no minimum credit score for investment property loans, per se, “although borrowers will need good or excellent credit.” PennyMac takes other factors into consideration when approving these loans such as a borrower’s cash reserves and debt-to-income ratio
  • Fixed-rate mortgages (FRMs): Fixed-rate loans allow you to secure a mortgage rate for the life of the loan, which can last 30 years or a shorter 10, 15, or 20. This loan type is ideal for those who want regular monthly mortgage payments
  • Adjustable-rate mortgages (ARMs): Adjustable-rate loans let you fix your rate for the first five, seven, or 10 years of your loan. After that, your rate will float with the market

Refinancing with PennyMac

In addition to home purchase loans, PennyMac also offers refinancing. Homeowners can choose between several refinance loans that will lower monthly payments, reduce interest repayment, or tap home equity.

  • Rate-and-term refinance: Exchange your original mortgage with a new one that offers more favorable loan terms or a lower interest rate
  • Cash-out refinance: Access your home equity by replacing your current mortgage with a new, larger loan amount, and then receiving the difference as a lump sum of cash. The FHA cash-out refinance loan is also available
  • VA cash-out refinance: Similar to a conventional cash-out refi, but allows borrowers to access 100% of their home equity.
  • VA IRRRL: Also known as the Veterans Affairs Interest Rate Reduction Refinancing Loan, this is a low-doc, low-cost refinance option
  • FHA Streamline Refinance: Similar to the VA IRRRL, but this loan type is designed with FHA homeowners in mind
  • USDA Streamlined Assist: Flexible eligibility requirements and lower closing costs

If you’re not sure which type of mortgage is the best fit for you, your loan officer can help you compare options and make the right decision.

Where can I get a mortgage with PennyMac?

NMLS ID #35953

PennyMac loans are available in all states and in the District of Columbia. You can apply for a mortgage online from anywhere, anytime. ou can see a full list of PennyMac’s state licenses here.

According to NMLS, PennyMac also has physical branches in a few select states, including Arizona, California, Florida, Hawaii, Missouri, Nevada, North Carolina, and Texas.

Is PennyMac the best mortgage lender for you?

PennyMac offers loans for a wide variety of home buyers and investment property owners. It may be particularly convenient for borrowers who want an online loan process. This lender offers a simple, convenient online application. And in most cases, you can expect to close within 30 to 45 days.

However, you may find more flexible lenders if you’re seeking an FHA loan and you have a low credit score. While other lenders might allow a score as low as 580 for FHA financing, you’ll need a minimum score of 620 with PennyMac.

As always, you should compare pricing with a few other lenders to make sure you’re getting the best deal available on your new loan.

Sources:

  1. Average mortgage rates and fees sourced from self-reported data mortgage lenders are required to file under the Home Mortgage Disclosure Act. Rates and fees shown reflect the previous year’s data and may not align with today’s mortgage rates
  2. Monthly principal and interest payments calculated using TheMortgageReports.com mortgage calculator. Payments shown are based on a $200,000 loan amount and assume a “very good” credit score. Property taxes and homeowners insurance are not included. Your own monthly payment will vary
  3. Number of mortgage originations for the previous year sourced from self-reported data mortgage lenders are required to file under the Home Mortgage Disclosure Act
  4. CFPB Complaints reflect the number of mortgage origination or closing-related complaints filed with the Consumer Financial Protection Bureau for the previous year
  5. Complaints per 1000 mortgages reflect the number of official complaints filed against a lender with the CFPB for the previous year, compared to the lender’s total number of mortgage originations for the previous year
  6. JD Power Rating reflects the company’s customer satisfaction score according to JD Power’s most recent Primary Mortgage Origination Satisfaction Study. Survey respondents score their lenders in four areas: application/approval process, communication, loan closing, and loan offerings