PennyMac Mortgage Review for 2024 | The Mortgage Reports (2024)

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

Overview

The Mortgage Reports may be compensated by some of the mortgage lenders we review. However, this does not affect our review process or the ratings lenders receive. All reviews are created independently by our editorial team. We review products and services from partner lenders as well as lenders we do not work with.

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.

Jump To Section...

  1. PennyMac mortgage rates
  2. PennyMac mortgage review for 2024
  3. Working with PennyMac
  4. PennyMac customer service reviews
  5. Mortgage loan options at PennyMac
  6. Where can I get a mortgage with PennyMac?
  7. Is PennyMac the best mortgage lender for you?
  8. Methodology

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.

Find your lowest mortgage rate. Start here

PennyMac mortgage review for 2024

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.

Methodology

The Mortgage Reports considers multiple factors when reviewing lenders. These factors include credit and down payment requirements, loan types offered, customer service indicators, and availability of online tools. We then use these factors to rank lenders in four categories:

  • Lending flexibility: Includes the number of loan types offered, special programs offered, minimum down payment requirements, and minimum credit score requirements
  • Customer service: Includes CFPB complaints per 1,000 loans and average rating from other top rating services
  • Ease of application: Includes the availability of an online pre-approval or pre-qualification process
  • Online experience: Includes the robustness of the lender’s online offerings, including online chat availability, phone number availability, and learning center/help center availability
Time to make a move? Let us find the right mortgage for you

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
PennyMac Mortgage Review for 2024 | The Mortgage Reports (2024)

FAQs

What is the Pennymac controversy? ›

Overview Of The Cases

These cases involve claims that PennyMac systematically, and unlawfully, underpays its hourly employees despite their extensive overtime and engages in other unlawful conduct.

Is Pennymac easy to get approved for? ›

PennyMac doesn't share the exact minimum requirements it uses to approve or deny your application. However, based on nationwide data from 2022, we can say that PennyMac approved customers who — on average — had a 74% loan-to-value (LTV) ratio or better. Most had a debt-to-income (DTI) ratio under 40%.

What FICO score does Pennymac use? ›

Currently, Pennymac requires a minimum 620 FICO Score on all government loan programs.

Is Pennymac a legit mortgage company? ›

Is Pennymac Reputable? Pennymac has an A+ rating with the Better Business Bureau.

What is the class action against PennyMac? ›

A unit of mortgage giant PennyMac Financial Services Inc. baited veterans into a payment-deferral program during the Covid-19 pandemic before forcing them into modified high-interest loans without warning, a proposed class action alleges.

Who is PennyMac owned by? ›

PennyMac was founded in 2008 with initial investments from BlackRock, HC Partners and the Company's founding management. Currently, approximately 20% of PFSI is owned by HC Partners, and 21% is owned by PFSI's executive officers and directors.

What credit score do you need for a FHA loan in 2024? ›

Currently, if you provide a down payment equal to 3.5% of the loan, you can qualify with a FICO score of 580 and above. A 10% down payment allows you to qualify with a lower score, starting at 500. By comparison, the credit score requirements for conventional loans tend to start at 620.

Where does Pennymac rank? ›

Pennymac is the second-largest FHA lender by loan volume in the nation — and is rated by Yahoo Finance as the best overall FHA lender. It's also on our list of the best VA loan lenders, and you'll find Pennymac in our review of the best lenders for first-time homebuyers.

What is an acceptable FICO score for a mortgage? ›

Credit score and mortgages

If lenders review all the information and determine that you are likely to make your mortgage payments in full and on time, you may be able to get better loan terms. The minimum credit score needed for most mortgages is typically around 620.

What's the best mortgage lender? ›

  • Bank of America. ...
  • Alliant Credit Union. Best for credit union home loans. ...
  • Wells Fargo. Best for conventional loans. ...
  • Veterans United Home Loans. Best for VA loans. ...
  • BMO Bank. Best for specialty loan programs. ...
  • PNC Bank. Best for first-time homebuyers. ...
  • Rocket Mortgage. Best online mortgage. ...
  • SoFi. Best for customer experience.

Is Pennymac a government backed loan? ›

The company's mortgage production focuses on the origination of first lien and government-backed or guaranteed mortgage loans through three methods: Correspondent Lending. PennyMac acquires newly originated loans from small banks and independent originators.

What bank is Pennymac? ›

PennyMac Financial Services, Inc. (NYSE: PFSI) is a specialty financial services firm with a comprehensive mortgage platform and integrated business focused on the production and servicing of U.S. mortgage loans and the management of investments related to the U.S. mortgage market.

What is the mortgage protection scandal? ›

Regency, the FSA said, had sold PPI to "right-to-buy" mortgage customers who would not have been able to claim, or who already held insurance. Many more followed, with Liverpool Victoria Banking Services fined £860,000 in 2008 for adding PPI to many customers' loans without their knowledge.

What is the Freedom mortgage controversy? ›

In August 2023, the Bureau fined Freedom $1.75 million for paying illegal kickbacks to real estate brokers and agents for mortgage loan referrals, an example of "anticompetitive behavior" and "a clear violation of federal law," Chopra said at the time.

What is the Fannie Mae accounting scandal? ›

The regulators said an accounting fraud at Fannie Mae included manipulations to reach earnings targets so that Mr. Raines, Mr. Howard, Ms. Spencer and other company executives could pocket hundreds of millions in bonuses from 1998 to 2004.

Is PennyMac a government backed loan? ›

The company's mortgage production focuses on the origination of first lien and government-backed or guaranteed mortgage loans through three methods: Correspondent Lending. PennyMac acquires newly originated loans from small banks and independent originators.

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