PennyMac Mortgage Review
PennyMac at a glance
| Minimum credit score: 580 to 620 Minimum down payment: 0% to 3.5% Available loan products and programs: Conventional, FHA, VA, home equity, jumbo |
Our verdict: PennyMac is best for homebuyers looking for a range of mortgage products and who are comfortable with a completely online experience.
| Pros | Cons |
|---|---|
Wide range of mortgage products Published rates are updated daily Completely online application | No first-time homebuyer programs or grants No physical branches No HELOCs or USDA loans |
Founded in 2008 and headquartered in California, PennyMac is one of the largest mortgage lenders in the nation, providing loans to homebuyers in all 50 states and the District of Columbia, plus some U.S. territories, including Guam, Puerto Rico and the Virgin Islands.
PennyMac mortgage products
Conventional
- PennyMac offers 20- and 30-year fixed-rate mortgages and home refinancing, including cash-out refinancing
- Conventional mortgage requirements include a minimum 3% down payment, a 620 credit score and a debt-to-income (DTI) ratio that is not higher than 45%. There may be exceptions for up to a 50% DTI ratio.
FHA
- If you are after less strict requirements, Federal Housing Administration (FHA) loans could help; PennyMac has 20- and 30-year FHA loan options
- FHA refinancing, including streamlined refinancing are available
- You’ll still need a 3.5% minimum down payment and a credit score of 580 or higher
VA
- PennyMac offers three types of Department of Veterans Affairs (VA) loans: purchase, cash-out refinance and streamline refinance
- VA mortgages have relaxed requirements, including 0% down payment
Home equity
- A home equity loan from PennyMac could allow you to borrow a large lump sum of cash at a relatively low rate.
Jumbo
- Jumbo loans allow homebuyers to borrow more than the conforming loan limit in the area. PennyMac provides mortgage loans up to $3 million, but eligibility requirements are stricter.
Special programs
- Investment property loans allow individuals to finance residential property that they plan to flip or rent out.
PennyMac mortgage rates and fees
Rates
PennyMac publishes its mortgage rates online. Compared to other large national banks, PennyMac’s rates are fairly competitive, and on average came in around 0.27 percentage points above the average prime offer rate (APOR) in 2022. The APOR is a benchmark rate that captures what is, in effect, the lowest APR a bank is likely to offer in the current market. Mortgage loans aren’t typically considered “higher-cost” until they reach 1.5 percentage points over the APOR.
Fees
PennyMac’s website doesn’t contain information about the fees it charges. But we do know that the average total cost of taking out a mortgage with PennyMac was $8,230 in 2022, according to data from the Federal Financial Institutions Examination Council (FFIEC). That included an average of $5,012 in origination fees.
| Mortgage rates published online? | |
| Rate information updated daily or weekly? | |
| Lender fees disclosed? |
PennyMac’s application experience
As you start home shopping, you typically need to have a mortgage preapproval, which lets sellers know you can afford the house. PennyMac offers preapprovals, and once your offer on a home is accepted, you can officially apply for a mortgage.
Online, the “Apply Now” button takes you to a page asking you to login or register with My Home By PennyMac, which is designed to guide you through the application process. This allows you to complete the entire application from whatever device you’re using.
How to boost your loan approval odds
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%.
In that same year, PennyMac denied about 23% of its mortgage applications. That’s near the middle of the pack when compared with other national mortgage lenders. For comparison, some large lenders have denial rates as low as the teens, and as high as the mid-fifties.
PennyMac’s customer service experience
You can email customer service through your PennyMac login, but if you’d like to talk to a person, you have a couple of options. You could call the customer service center at 800-777-4001 or the sales center at 888-870-6229 during these times:
- Monday-Friday: 5 a.m. to 6 p.m. PT
- Saturday: 7a.m.to 11a.m. PT
How does PennyMac compare to other lenders?
| PennyMac Mortgage | Mr. Cooper | Ally Bank | |
|---|---|---|---|
| Lender rating |  |  |  |
| Minimum credit score | 580 to 620 | Not published | 620 |
| Minimum down payment | 0% to 3.5% | 0% to 3.5% | 3% |
| Loan products and programs |
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|
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| Rate spread* | 0.27% | 0.58% | 0.13% |
*Rate spread is the difference between the average prime offer rate (APOR) — the lowest APR a bank is likely to offer any private customer — and the average annual percentage rate (APR) each lender offered to mortgage customers in 2022. The higher the number, the more expensive the loan.
How we rated PennyMac Mortgage
LendingTree’s mortgage lender rating is based on a five-point scoring system that factors in several features, including digital application processes, available loan products and the accessibility of product and lending information.
LendingTree’s editorial team calculates each rating based on a review of information available on the lender’s website. Lenders receive a half-point on the “offers standard mortgage products” criterion if they offer only two of the three standard loan programs (conventional, FHA and VA). In some cases, additional information was provided by a lender representative.
PennyMac’s scorecard: 5/5
Publishes rates online
Offers standard mortgage products
Includes detailed product info online
Shares resources about mortgage lending
Provides an online application