Pennymac Mortgage Review 2022 - Credible (2024)

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Pennymac is one of the country’s largest home lenders. Whether you’re looking to buy a home or refinance your current mortgage, Pennymac has a variety of loan types to choose from.

It’s tempting to jump right in when you find a mortgage lender with the kind of home loan you need. But before you apply, read through this Pennymac review to learn more about the specific loan products and services it offers.

In this review:

• Pennymac mortgage review
• Pennymac mortgage refinancing review
• How Pennymac can improve
• Compare multiple lenders before you borrow

Pennymac mortgage review

Best if:

• You’re seeking a competitive interest rate
• You want to apply online rather than in person
• You’re interested in jumbo loans or government home loans

Pennymac Loan Services offers competitive mortgage rates and an online loan process that makes it easy to get started on the path to homeownership. It’s also one of the top home loan servicers and VA lenders in the U.S. by dollar amount, making it a well-established brand.

You’ll find most standard home loan options at Pennymac, including conventional, jumbo, FHA, and VA loans. You can apply online with any device using the My Home By Pennymac portal — no need to call a customer service representative to get started.

Conventional mortgage loans

Pennymac offers several options for buyers interested in a conventional loan, with 15-, 20-, and 30-year fixed-rate loans available. You’ll also find adjustable-rate mortgage loans, which typically start with a fixed-rate period of five, seven, or 10 years followed by periodic rate adjustments.

You can use a conventional loan to purchase a primary residence, a vacation home, or an investment property.

Pennymac isn’t our partner, but you can use Credible to compare prequalified rates from other mortgage lenders all at once. Credible can help you find a great interest rate on a conventional mortgage loan — and you don’t have to leave our platform.

Jumbo loans

Pennymac jumbo loans let you borrow up to $2 million, allowing you to purchase a pricier home with only one loan. You’ll need a 700 credit score, significant cash reserves, and as much as 20% down to qualify for one, though.

FHA loans

An FHA mortgage loan might be of use to you if you have little money for a down payment or below-average credit. Benefits include a lower credit score requirement and the ability to purchase with just 3.5% down. And in the event you want to refinance later, you have the ability to refinance into a conventional or another FHA loan.

However, rates tend to be higher on FHA loans, and borrowers must pay a mortgage insurance premium in the form of an upfront fee due at closing and monthly premiums, which are rolled into the mortgage payments.

VA loans

VA mortgage loans make it easier for active-duty service members and veterans to purchase a home. Although you’ll pay an upfront funding fee, which you can roll into the loan, you won’t have to pay mortgage insurance for a VA loan. In addition, rates are highly competitive on VA loans, and you can buy with no money down.

Here are more details about purchase loans from Pennymac:

Pennymac mortgage refinancing review

Best if:

• You’re seeking a competitive refinance rate
• You want to refinance an existing FHA, VA, or USDA loan
• You want to refinance a jumbo loan

No matter what kind of mortgage you currently have, Pennymac probably has a mortgage refinance option for you. By refinancing, you might be able to get a lower rate, a more favorable term, or even borrow against your home equity.

Conventional refinance loans

You can use a conventional refinance loan to:

• Reduce your interest rate
• Extend the term of your loan
• Switch from a variable-rate loan to a fixed-rate loan
• Cash out equity

Similar to its purchase loans, Pennymac refinance loans can be used for a primary residence, a second home, or an investment property.

Jumbo refinance loans

If you’re a well-qualified homeowner with a non-conforming loan, you might be able to refinance to reduce your interest rate and save money without extending your current loan term.

At Pennymac, jumbo refinance loans of up to $2 million are available to borrowers with 12 months’ worth of cash reserves. With the cash-out refinance option, you can draw up to $500,000 against your equity.

FHA refinance loans

As an FHA borrower looking to refinance, you have a few options. One is the FHA-to-conventional refinance, which you can use to eliminate the mortgage insurance on your current FHA loan, as long as you have sufficient equity.

Pennymac also offers FHA streamline refinances, which have reduced documentation requirements and no appraisal requirements, and FHA cash-out refinance loans.

VA refinance loans

If you’re a VA-eligible borrower, you also have a few good refinance options. Pennymac offers a VA interest rate reduction refinance loan (IRRRL) which, as the name suggests, lets you trade your current VA loan for a new one with a lower interest rate.

There’s also a VA cash-out refinance loan you can use to draw from your equity. You can use the funds however you want.

USDA streamlined assist

Pennymac doesn’t offer a USDA purchase loan, but it does have a revamped version of the USDA refinance loan. USDA streamlined assist refinance loans are easier to qualify for and have lower fees than the previous USDA refinance loan. It’s called a “streamlined” loan because no appraisal is required, which helps you close on your new loan faster.

You might qualify for a streamlined assist loan if you currently have a USDA-backed mortgage and would save at least $50 per month by refinancing.

How Pennymac can improve

As one of America’s largest home loan servicers and VA lenders, Pennymac offers competitive rates on a variety of home mortgage loans. But there’s some room for improvement:

• Offer conventional loans with a 97% loan-to-value (LTV) option: Pennymac requires at least 5% down with conventional financing. However, Fannie Mae and Freddie Mac both have programs that let eligible homebuyers purchase with just 3% down.
• Offer home equity loans: Refinancing into a new first mortgage makes sense for many homeowners, but a cash-out refi isn’t always the best choice for drawing equity from your home. A home equity loan and home equity line of credit would appeal to homeowners who are satisfied with their current mortgage but want to tap into their equity.
• Offer USDA purchase loans: USDA-backed mortgage loans help qualified buyers purchase homes with no money down. Pennymac does offer a USDA streamlined assist loan that can help current USDA borrowers reduce their fees, but it doesn’t currently offer purchase loans backed by the USDA.

Compare multiple lenders before you borrow

Pennymac has helped over 4 million homeowners achieve their dreams, but it’s always a good idea to compare loans from a few different lenders before making a final decision.

In addition to looking at rates, consider down payment requirements, fees, and any special programs that might make one lender stand out from the rest.

To help you find the best lender and the right loan for you, Credible lets you check mortgage purchase and mortgage refinance rates from all our partner lenders in just a few minutes, with no impact on your credit score.

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