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What Pennymac Offers
Pennymac offers several popular mortgage products, including conventional loans, jumbo loans, and loans from the Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) and U.S. Department of Agriculture (USDA).
Mortgage refinance loans, home equity loans and cash-out refinance loans are also available, but the lender doesn’t offer renovation loans or HELOCs.
Loan amounts, terms and down payment requirements vary by loan program and borrower qualifications. Pennymac publishes sample interest rates online every day and you can also get an instant rate estimate better tailored to your credit profile.
Loan Types
Mortgage options for purchasing or refinancing a home through Pennymac include:
- Conventional (fixed- and adjustable-rate mortgages)
- Jumbo
- FHA purchase
- FHA streamline refinance
- FHA cash-out refinance
- VA purchase
- VA IRRRL
- VA cash-out refinance
- USDA (including streamlined assist refinance)
- Investment property loans
- Home equity loans
While Pennymac doesn’t have physical branch locations, it offers online preapproval and application processes that make it easy to start the borrowing process. If you’re not ready for preapproval, you can get an instant personalized rate estimate on the Pennymac website without entering your Social Security number.
Available mortgage rates and down payments depend on your creditworthiness, loan type, loan amount, location and other factors.
Mortgage Offers and Discounts
Homebuyers who find a real estate agent through Pennymac’s Home Connect program can earn between $350 and $9,500 cash back after closing. You can also search for a home in your market through the company’s website.
Pennymac’s rate lock program lets preapproved borrowers lock in their rates for up to 90 days. To qualify for this feature, you must initiate a mortgage application for a specific property and go under contract at least 30 days before the rate lock expires. This means you can have up to 60 days to shop for a home after preapproval.
In addition to these discounts, you may also qualify for a $1,000 discount off your total closing costs. This offer excludes jumbo, refinance, third-party and in-process loans.
Related: Mortgage Rate Forecast For 2023
Customer Support
If you have questions during the online application process or prefer to speak to a Pennymac representative via phone, the sales center is open Monday through Friday from 5 a.m. to 6 p.m. PDT and Saturday from 7 a.m. to 3 p.m. PDT. Customer support is unavailable on Sunday.
Pennymac offers additional customer support phone numbers for phone payments, payment questions and loan servicing. Existing borrowers can manage their accounts online by registering for the lender’s mortgage access center.
Minimum Borrower Requirements
Pennymac has the following mortgage approval criteria:
Credit Score and History
Pennymac’s minimum credit score requirements vary by loan type. However, you may be able to qualify for a mortgage even if you don’t meet the exact score requirements.
Pennymac’s minimum credit score requirements are as follows:
- Conventional. 620
- FHA. 580; no minimum credit score on FHA streamline refinances for existing Pennymac customers
- VA. 580 (purchase); 620 (refinance); no minimum credit score for existing Pennymac customers on VA IRRRLs
- USDA. Pennymac only offers the USDA Streamlined Assist refinance. USDA purchase loans are not available. 580 minimum credit score for the Streamlined Assist option; no minimum credit score for existing Pennymac customers.
Minimum Down Payment
You’ll need to meet the following minimum down payment requirements if you choose to borrow with Pennymac:
- Conventional. 3% down for First Time Homebuyers
- FHA. 3.5%
- VA. 0%
- USDA. Pennymac does not currently offer USDA purchase loans
- Jumbo. 10.01%
Remember that if you put down less than 20% of the purchase price, you’ll be responsible for private mortgage insurance (PMI).
Maximum Debt-to-Income (DTI) Ratio
Your debt-to-income ratio—or DTI—is your total monthly debt obligations compared to your monthly gross income, expressed as a percentage. This metric demonstrates your ability to make monthly mortgage payments in addition to your current debts.
Conventional mortgages from Pennymac are available to borrowers with a DTI of up to 45%, but it may be possible to qualify with a ratio of up to 50%. Jumbo loans also have a maximum DTI of 45%, while requirements vary for other types of loans (up to 50% for FHA loans and up to 41% for USDA loans).
Use Forbes Advisor’s mortgage calculator to determine how much you can afford to spend on monthly payments.
What Fees Will You Pay?
Pennymac publishes purchase rates and refinance rates for each loan type it offers. Interest rates are updated daily but are based on a borrower with a 740 credit score and don’t necessarily reflect your unique financial circ*mstances. However, you can use Pennymac’s personalized rate tool for a more accurate estimate.
The company doesn’t publish mortgage costs beyond interest rates. Generally, closing costs may range from 2% to 5% of the home price, including mortgage origination fees between 0.5% and 1% of the loan amount.
How To Apply for a Pennymac Mortgage
Pennymac has no brick-and-mortar branches, but you can start the preapproval process or apply for a mortgage online or by phone.
If you proceed with a loan application through Pennymac, you’ll need to create a My Home By Pennymac account and provide additional documentation as part of the identity and income verification process. This documentation typically includes your Social Security number, pay stubs for the past two months, W-2 forms for the past two years, bank statements, federal tax returns, a signed contract of sale and details about your current debts.
You’ll be able to complete your application online, but Pennymac requires you to speak with a loan officer to determine your loan program and term and to lock in your interest rate.
As for closing timelines, conventional purchases currently take an average of 35 days to close while refinance loans take 33 days, according to a Pennymac representative.
Funds for home purchases are typically available the same day as signing, but some states require an additional day for loan disbursem*nt. These states include:
- Alaska
- California
- Connecticut
- Iowa
- Maine
- Maryland
- Massachusetts
- Minnesota
- New Hampshire
- New York
- Oregon
- Rhode Island
- Utah
- Vermont
- Wisconsin
Funds for a cash-out refinance usually arrive 48 to 72 hours after signing.
What To Do If You Get Turned Down
If Pennymac denies your mortgage application, contact your loan officer to determine why the lender turned you down. If your application was inaccurate or incomplete, you may be able to correct the issues and resubmit it. However, if Pennymac rejected your application due to poor credit, high DTI or inadequate employment, you’ll need to take other steps before applying again.
If you have a bad credit score or high outstanding debts, consider paying down loan balances before reapplying for a mortgage. Doing so can improve your DTI and may improve your credit score. In addition to checking your credit score, scan your credit report for inaccuracies that may negatively impact your score and dispute them. Though it can take time, you can also improve your credit score by making on-time loan and credit card payments.
If you don’t have time to improve your credit score, consider applying for a mortgage with a co-borrower or co-signer. Keep in mind that a co-signer will be equally responsible for making payments on your mortgage. Only ask someone you trust and ensure they understand the arrangement’s implications.
Finally, compare multiple mortgage lenders to identify the most competitive interest rates and increase your approval odds. The Consumer Financial Protection Bureau (CFPB) reports that submitting multiple mortgage applications within 45 days of each other has the same impact on your credit score as submitting a single application. Keep this timeline in mind when shopping for mortgage rates and terms.
Related: How To Get A Mortgage: 7 Steps To Success
What People Are Saying About Pennymac’s Loans
Pennymac has 2.6 out of 5 stars through Trustpilot based on 1,533 customer reviews. The lender’s rating on the Better Business Bureau (BBB) website is much higher at 4.42 out of 5 stars based on 1,925 customer reviews with an A+ BBB rating. Negative reviews focus on issues with mortgage payments, difficulty reaching customer service, homeowners insurance problems and trouble with closings and escrowed funds.
Methodology
We graded Pennymac based on features that have a meaningful impact on the cost of a mortgage and a borrower’s experience, including interest rates, loan options, accessibility, closing time and customer service.
We award bonus points if a lender offers a specialty rate discount or mortgage product, a home equity product or maintains a fully online mortgage application process.
Our scoring method is broken down as follows:
- Interest rate. 20%
- Loan options. 20%
- Time to close. 20%
- Accessibility. 20%
- Customer service experience. 20%
- Bonus points. Up to 25 points
We chose to focus on these core elements to bring forward lenders that offer the most competitive rates while also providing a satisfactory customer experience accessible to borrowers of all financial backgrounds. We believe this scoring system best reflects consumers’ top priorities when comparison shopping for mortgage lenders.
To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Mortgage Lenders.
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