PennyMac Mortgage Rates Review: Overview, Facts, Features, Plans, Pros and Cons

PennyMac Mortgage Rates Review: Overview, Facts, Features, Plans, Pros and Cons

PennyMac Loan Services, LLC was established in 2008 with the stated objective of restoring America's faith in homeownership by providing high-quality and reliable mortgage services. Although the company is based in California, its home loan solutions are offered in all 50 states. PennyMac has quickly risen to the top of the mortgage lending industry in the United States by providing a wide range of credit options, including conventional and government-backed loans.


PennyMac has only been in business for 11 years, yet in that time it has grown to become one of the country's leading direct mortgage lenders. PennyMac's large selection of conventional and government-backed loans has helped it appeal to a wide range of borrowers, particularly those searching for low down-payment options. The majority of this lender's home loan options are available with as little as 3% down, while bigger down payments can help cut interest rates and monthly payments. PennyMac's liberal qualification standards favor borrowers with moderate-to-poor incomes, as it often accepts applications with credit scores as low as 620. Despite the fact that PennyMac is fully accredited by the Better Business Bureau, it has had over 300 customer complaints in the last 10 years. Its profile now has a 1-star customer rating, with many of the complaints referencing poor customer service and payment processing issues. The majority of PennyMac's clients use their online account services to manage their home loans, which could explain why consumer inquiries are being answered faster.

PennyMac Mortgage Facts

  • In 2018, U.S. News & World Report named us the best lender for USDA loans.
  • Credit scores as low as 640 are accepted.
  • Fixed and adjustable-rate mortgages, as well as FHA, VA, USDA, and jumbo loans, are all available.
  • Conventional and government-backed loans have low down payment requirements.
  • The Better Business Bureau has given us full accreditation.
  • For down payments of less than 20%, private mortgage insurance is necessary.

PennyMac loan specifics

PennyMac is a publicly listed national mortgage lender dedicated to providing customized lending alternatives for home buyers throughout the United States, including conventional fixed and adjustable-rate mortgages, FHA, VA, USDA, and jumbo loans. This lender works with both first-time and repeat borrowers to find inexpensive interest rates and flexible term options, while each mortgage has its own set of requirements. PennyMac offers a variety of low-down-payment home loan options, making it an ideal choice for low-to-moderate-income customers.

Fixed-rate loans

This traditional loan allows consumers to lock in a low-interest rate for the duration of the loan, providing outstanding long-term stability and predictable monthly payments. A PennyMac fixed-rate mortgage can be obtained with as little as a 3% down payment and a loan term of 15, 20, or 30 years for qualified applicants. While private mortgage insurance is required for down payments of less than 20%, borrowers who reach an 80 percent loan-to-value ratio can have it removed. This mortgage can be used to fund primary residences, second homes, and rental properties, making it an excellent option for borrowers wishing to make a long-term investment in their property.

Adjustable-rate loans

This conventional loan option may assist homebuyers in searching for the lowest short-term rates since it can keep monthly payments low for an initial fixed-rate period. For the first 3 to 10 years of the loan period, borrowers can lock in a fixed rate, after which the interest rate and monthly payment amount will fluctuate according to the market index. This loan option, like its fixed-rate counterpart, can be secured with as little as a 3% down payment. The low beginning rate and flexible loan terms are ideal for homebuyers who expect to move or sell their house within a few years.

Cash-out refinance loans

This lending program allows borrowers to use the equity in their house to fund home renovation projects, clear outstanding debts, or cover other obligations. PennyMac offers fixed and adjustable-rate refinancing with a range of loan terms, allowing customers to consolidate their debts without being buried by high-interest rates. This refinancing option may be a good fit for conscientious homeowners who have made on-time mortgage payments and want to use the equity they've earned to manage their debt.

Jumbo loans

PennyMac offers both fixed- and adjustable-rate jumbo loans up to $2 million for more expensive houses. This financing option was created to assist with property purchases that exceed Fannie Mae and Freddie Mac's conforming loan restrictions. Borrowers must have a credit score of 700 or above and be able to make a 20% down payment to qualify. Jumbo loans are ideal for purchasing luxury residences and can be used to finance a variety of properties, including multi-unit and vacation properties.

FHA loans

The Federal Housing Administration insures this loan type, which was established to help low-to-moderate-income borrowers and first-time homeowners achieve inexpensive mortgage rates. An FHA mortgage, unlike other home loan programs, has lenient credit score standards and can be secured with credit ratings as low as 580. Borrowers with stronger credit scores are typically offered better rates, resulting in reduced monthly payments. PennyMac allows as little as 3.5 percent down to get started, making it ideal for homebuyers who are unable to make big down payments.

VA loans

This no-money-down mortgage option, sponsored by the Department of Veterans Affairs, is available to eligible veterans and service members. Borrowers who meet the criteria can choose from a variety of fixed-rate loan terms, including 15, 20, and even 30 years. Even on purchases with no down payment, this home loan scheme does not require private mortgage insurance, which is a significant benefit.

USDA loans

PennyMac offers borrowers interested in purchasing a property in specific rural and suburban areas a 100 percent financing alternative. The United States Department of Agriculture insures this home loan program, which was created to assist moderate-to-low income borrowers in obtaining inexpensive mortgages in less-developed areas of the country. This program allows eligible homeowners to purchase a property with no money down, albeit a credit score of 640 is required.

Investment property loans

This loan program is designed for borrowers who aim to modify or flip properties for a profit, and it may be beneficial to homebuyers looking to invest in single-family houses, condos, apartment complexes, and townhomes. Minimum down payments varies as per property type, with vacation homes requiring a 10% down payment and condos requiring a 15% down payment. Although specific debt-to-income limits may apply, this financing scheme covers all sorts of properties.

PennyMac mortgage customer experience

PennyMac is a direct mortgage lender dedicated to assisting all sorts of homebuyers in overcoming the unique hurdles of owning property while maintaining low-interest rates. Because PennyMac does not have a significant network of branches or banking products, it devotes all of its resources to assisting the mortgage application and administration process. Borrowers from any of the 50 states in the United States can deal with this lender to buy, refinance, remodel, or invest in their dream home, however, some restrictions may apply. PennyMac's website has a wealth of instructional tools, including articles, FAQ pages, first-time homeowner buying advice, and mortgage calculators. Personal information such as social security numbers is necessary, but interested borrowers can get individualized rate quotations, apply for pre-approval, or complete a mortgage application online.

PennyMac lender reputation

Despite the fact that PennyMac has only been in operation for 11 years, it has quickly established itself as one of the country's leading online mortgage lenders. PennyMac has been completely accredited since 2014 and has an A+ rating with the Better Business Bureau. Despite its accreditation, PennyMac has a 1-star customer rating and over 385 customer complaints on its BBB profile. According to the Consumer Financial Protection Bureau's 2017 complaint report, this lender receives an average of 33 complaints per month. PennyMac is an Equal Opportunity Lender, and in 2018, U.S. News and World Report selected PennyMac as the best lender for USDA loans.

PennyMac Mortgage Qualifications

Loan Type Rate Type Loan Terms Down Payment Requirements Credit Score Requirements
Fixed-Rate Loans Fixed 15, 20, or 30 years                      3%                     620
Adjustable-Rate Loans Variable         3 – 10 years                      3%                     620
Jumbo Loans Fixed or Variable     30 year fixed or 5/1 ARM and 7/1 ARM                   20%                     700
FHA Loans Fixed or Variable 15 and 30-year fixed or 5/1 ARM                   3.5%                    580
VA Loans Fixed 15, 20, or 30 years                     0%                     620
USDA Loans Fixed 15 or 30 years                     0%                     640
While the qualifications for each of PennyMac's mortgage programs vary, they all have modest down payments and flexible credit score criteria. Traditional mortgages typically need at least a 5% down payment, while PennyMac takes as little as a 3% down payment on both fixed and adjustable-rate loans. Furthermore, most lenders require credit scores of at least 680, whereas PennyMac is ready to work with clients with ratings as low as 620. Homebuyers with little or no credit histories are urged to apply, since they may qualify for one of PennyMac's various government-backed programs. However, it's unclear whether non-traditional credit information is taken into account. PennyMac's major selling point is that it offers a wide selection of home loan and refinance alternatives. The low-to-moderate-income borrowers have several options, and first-time homebuyers can get low-interest mortgage rates without depleting their savings accounts with a significant down payment. Although private mortgage insurance is necessary for down payments of less than 20%, PennyMac will work with homeowners to have the charge removed once they have adequate equity. Homebuyers have round-the-clock access to their loan accounts and can contact a lending agent by email, phone, or through PennyMac's contact page because this lender does the majority of its business online.

PennyMac's phone number and additional details

  • Homepage URL:
  • Company Phone: 1-888-870-6229
  • Headquarters Address: 3043 Townsgate Rd, Suite 200, Westlake Village, CA 91361

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