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PennyMac (NMLS #35953) is one of the largest mortgage lenders and loan servicers in the U.S. It originates loans in all 50 states and provides free customized rate quotes without taking your personal information. PennyMac was founded in 2008 and is based in Westlake Village, California.
Pros & Cons
- Publishes rates online
- Available in all 50 states
- Lock & Shop program
- Helpful online mortgage tools
- No in-person branches
- No home equity loans or HELOCs
PennyMac offers conventional, jumbo, FHA, VA and USDA loans in all 50 states. Customers who are preapproved lock in a rate before finding a property. The company makes it easy to get a customized rate quote with no personal information.
PennyMac publishes purchase and refinance loan rates on its website. These rates assume various loan conditions, so they’re only meant as an example offering. You can get a custom quote, which takes less than a minute and requires no personal identifying information. PennyMac shows you interest rates, annual percentage rates (APRs) and monthly payment amounts for various loans.
PennyMac’s loan options include both fixed-rate and adjustable-rate mortgages (ARMs). Fixed-rate loans have a rate and payment that stays the same throughout the loan term. ARMs from PennyMac have an initial fixed-rate period with a low rate for either five, seven or 10 years; the rate then adjusts every six months according to an index and a margin set by the lender.
During the three-year period from 2019 to 2021, according to Home Mortgage Disclosure Act data, PennyMac’s average home purchase rate was lower than the national average.
PennyMac average home purchase rate vs. national average
|Year||Difference from national average|
To get a mortgage from PennyMac, you can start the process by requesting a free, no-obligation customized rate quote — or you can jump in and begin the preapproval process.
The custom rate tool asks a few simple questions about the type of loan you’re looking for, the property and your credit score. It will then provide best-fit loan options and estimated rates and payments.
To see real rate offers, start the preapproval process by answering a series of questions and providing your personal and contact information. A PennyMac representative then reaches out to you. Alternatively, you can skip the online questionnaire and call the lender directly.
If you’re preapproved, PennyMac will lock in your rate for up to 60 days. You can lock before you’re even in contract on a home.
Throughout the application process, you will be able to upload, sign and verify documents at the mortgage access center (m.a.c.) and track the progress of your application.
PennyMac application features
|Mobile document upload|
|Publishes minimum rate on website|
|Rate lock||60 days|
|Pre-qualification (no hard credit pull)|
|Certified approval letter|
PennyMac offers conventional mortgages (fixed- and adjustable-rate), jumbo loans (for high-value properties) and FHA, VA and USDA loans. There’s also a specialty program for investment property loans.
From 2019 to 2021, the number of home purchase loans closed by PennyMac nearly doubled, according to data from the Home Mortgage Disclosure Act. In 2021, PennyMac received over 25,000 home purchase loan applications; it closed on 18,531 loans and denied 1,864 (7.5%) applications.
Loan applications for home purchases only by year
|Home purchase applications||25,017||18,329||13,027|
|Home purchase loans closed||18,531||12,125||9,342|
|Home purchase applications denied||1,864||2,129||1,772|
|Home purchase preapprovals denied||0||0||0|
You can refinance with PennyMac in order to get a lower rate, lower your payment, pay off your loan faster or get cash out of your existing home equity. The company’s refinancing calculator can help you understand how much you would save monthly and over the whole loan term.
In 2020 and 2021, as rates were hitting historic lows and borrowers sought to pay less interest, PennyMac made a higher percentage of refinance loans. In 2020, over 88% of its loans were refinance loans; in 2021, the percentage jumped to over 90%. As rates bounce back, home lenders are expected to close on fewer refinance loans.
Home purchase vs. refinance loans by year
|Home purchase loans||9.39%||11.57%||20.35%|
PennyMac generally requires a credit score of at least 620 for a conventional loan, plus a down payment of at least 3%. It also advises having a debt-to-income (DTI) ratio of no more than 45%. If you’re looking for a jumbo loan, you need a credit score of at least 700, a 10.01% down payment and a DTI ratio of 43% or lower.
PennyMac doesn’t publish minimum credit scores for its government-sponsored loans, like FHA, VA and USDA. Typically these have lower minimum credit score requirements than a conventional loan. You may qualify for an FHA loan with a minimum credit score of 500 — but note that if your credit score is below 580, you need a down payment of at least 10% (those with a score above 580 can put 3.5% down). VA and USDA loans don’t require down payments.
For investment property loans, PennyMac requires a down payment of 15% to 25%, depending on the type of property. It also states you should have good or excellent credit and a DTI ratio of no more than 50%.
National mortgage requirements by type
|Min. credit score||Min. down payment||Compare with other lenders|
|Conventional||Typically 620||Typically 3%||Mortgage lenders|
|FHA||500||3.5% with 580 credit score||FHA lenders|
|VA||Set by lender (often 580)||0%||VA lenders|
|USDA||Set by lender (often 640)||0%||USDA lenders|
For more information on other loan types, see our guide on HELOCs, home equity loans and jumbo loans.
Cost and fees
To get an estimate of costs and fees on a PennyMac loan, you need to apply. After receiving your application, PennyMac will send you a Loan Estimate form with estimates of loan charges, including closing costs. Later in the process — at least three business days before closing — you’ll get a Closing Disclosure form with more precise numbers, including the exact amount you need to bring to closing.
PennyMac offers ways to save money at closing on some loans. Customers who get preapproved for a purchase loan are eligible for a 0.5% discount off the principal loan amount, applied as a discount on closing costs or principal. PennyMac also waives the $1,200 origination fee on conventional and FHA loans.
What is PennyMac?
PennyMac is a financial services company that focuses on originating and servicing mortgages. It was founded in 2008 and is based in Westlake Village, California, in western Los Angeles County.
Is PennyMac legit?
PennyMac is one of the largest mortgage lenders and servicers in the U.S. In the 12 months ending on June 30, 2022, it produced $166 billion in loan originations, according to the company.
Where is PennyMac available?
PennyMac is licensed in all 50 states. It has sales offices in Arizona, California, Florida, Hawaii, Nevada, Tennessee and Texas.
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Don’t trust PennyMac!!!! All they do is lie!!!! Constant issues from beginning and now holding our insurance money when trying to fix home 6 months after Hurricane Ian!!! Every person you talk to lies! Then they go back on what they actually say!!!
Unbelievably bad customer service. I'm a Military veteran and have been around for 62 years and I thought I'd seen it all. Pennymac provided me with a forbearance on my mortgage for 3 months during Hurricane Ian. My house flooded and I spent $30,000 in repair work so it was a relief to be able to hold off on mortgage payments.
When I first spoke with a rep about the forbearance it was my understanding that I could repay the missed payments over time. After the 3 months, I called to find out what my payments would be and the term. Basically what I got was a debt collection spiel and the runaround and someone was supposed to call me back. Never happened so I called again after 3 weeks and same collection spiel and I was told I needed to pay all 3 months back immediately. I asked to pay it over 6 months which would be a payment and a half each month and was told no. WHY ON EARTH WOULD I HAVE A FORBEARANCE IF I HAD TO PAY IT BACK RIGHT AWAY. THAT DOESN'T HELP AT ALL. They finally presented me with a 3 month option which I accepted but still puts me in a tough spot to come up with double payments each month. Damn heartless!
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- Federal Financial Institutions Examination Council, “HMDA Data Publication.” Accessed Sept. 27, 2022.
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