PennyMac Mortgage Review

PennyMac is a decent online lender, but you can probably find better rates and services elsewhere.

J.D. Power Rating
3/5
Min. Credit
620
Min. Down Payment
3%
SimpleScore
3.3 / 5.0
close
SimpleScore PennyMac Mortgage 3.3
Perks 3
Credit Impact N/A
Customer Satisfaction 3
Product Variety 5
Fees 2
  • PennyMac offers a straightforward experience for customers who like to do business online.
  • Everything is easily accessible from the online portal, from rate quotes to loan servicing.
  • This lender offers a lot of flexibility with no minimums, a jumbo loan maximum of $2 million and a good mix of loan types and terms.
  • The general customer service rating is just average for this lender. JD Powers awards the lender 778 out of 1000 points, which is just one point above the industry average.

PennyMac has made $22 billion in loans since 2012. Mortgages from PennyMac are available in 49 states (excluding New York). The company has headquarters in California, but most of its lending is done online or by telephone. 

PennyMac is best for borrowers who like to access their loan accounts online since there are no in-person services in most states. This lender offers a “close on-time promise” with a promise of a $500 gift card if it doesn’t meet that goal.

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In this article

    PennyMac mortgage loans at a glance

    30-year fixed-rate2.50% to 4.375% (excluding autopay discount)
    Product varietyConventional (10 to 30 years)
    FHA (10 to 30 years)
    VA (10 to 30 years)
    Fixed-rate and ARM loans
    Refinances
    Jumbo loans
    FeesOrigination fee: No fee for PennyMac VIP members; $1,100 for non-members
    Appraisal deposit fee: $465 to $1,000
    Broker fee: $100 to $300, depending on loan type.

    What we like about PennyMac 

    Online access

    PennyMac offers a straightforward experience for customers who like to do business online. Everything is easily accessible from the online portal, from rate quotes to loan servicing. That’s a solid fit for borrowers who like to do everything online, but it might not work well for people who prefer in-person loan servicing.

    Lots of loan options 

    PennyMac has a very flexible borrowing range, with no minimum loan amount and jumbo loans of up to $2 million. This lender offers a good, diverse mix of loan types and terms, including  conventional, FHA and VA loans with terms from 10 years to 30 years. Rates can be fixed or adjustable. That means there are options for almost every type of borrower out there.

    Things to consider 

    Average customer service

    The general customer service rating is just average for this lender. JD Powers awards the lender 778 out of 1000 points, which is just one point above the industry average. That’s not a great score overall, but it’s not awful either. However, customer service can be really important to some borrowers, so it’s something to keep in mind if you’re looking for a lender with superior customer service.

    Higher rates than the competition

    PennyMac doesn’t offer the best mortgage rates in the industry —  it is solidly in the middle of the pack. If you have a high credit score, you can probably find better rates elsewhere.

    PennyMac vs. the competition 

    Quicken Loans

    Both PennyMac and Quicken offer their entire lending process online. The two lenders offer a similar range of loan types and amounts.

    Quicken’s origination fee is 0.5% of the total loan amount with a max of 1% for specialized loan types. PennyMac’s $1,100 origination fee is a bargain by comparison, but be sure to check rates to see which lender offers you a better total package.

    Better.com

    Like PennyMac, Better.com offers an entirely online lending process.  Better.com doesn’t have an origination fee and generally offers better rates, so be sure to check with them before you borrow.

    If you’re a veteran who qualifies for a VA loan, you won’t find one at Better.com, so PennyMac will be a better fit for you. Both lenders will give an online quote tailored to your market and estimated FICO score, so you can easily compare without filling out an application.

    Read: Best Mortgage lenders

    How much will a PennyMac Mortgage cost?

    Aside from the typical closing costs, PennyMac charges an $1100 origination fee, which is waived in some promotional circumstances. You’ll also pay between $465 and $1000 for an appraisal, and your broker fee will be between $100 and $300.

    The rates won’t be any lower than the competition either, which will add to the cost of your loan. However, under its Better Rate promise, PennyMac promises to offer you the best rate available. It will give you a $250 gift card if you can find a better rate from a competitor.

    The PennyMac Close On-Time Promise compensates you with a $500 gift card if your closing is delayed. These offers do not apply to refinance loans, third-party originated loans and some other special circumstances.

    Compare Mortgage Rates

    Compare top mortgage lenders in your area and find the right fit for you.

    Cheaper alternatives to PennyMac mortgage loans

    The origination fee that PennyMac charges is higher than a lot of other lenders, so chances are that you can find a better, cheaper alternative by searching around. Between that high fee and the higher than average mortgage rates, chances are that you’ll be paying more for a loan from this lender than you would with most larger comparable lenders.

    If you can get the origination fee waived via a promotional offer you may save money compared to other lenders, but if you can’t, you might be better off looking almost anywhere else.

    PennyMac in the news 

    Read: Best Refinance Rates

    PennyMac mortgage FAQs

    Not usually. In some cities, you can meet in person with a PennyMac staff member, but it’s never required. The lending process is handled entirely online and by telephone.

    Yes, you can. For conventional mortgages, PennyMac looks for a score of 620 or above. FHA borrowers can have a score as low as 580 if they qualify in other ways.

    No. You can put down as little as 3% for an FHA loan with PennyMac.

    Compare top mortgage lenders

    We welcome your feedback on this article and would love to hear about your experience with the mortgages we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Methodology

    SimpleScore

    We’ve created the SimpleScore to help you objectively compare products and services here at The Simple Dollar.

    Our editorial team:

    • Identifies five factors to compare across each brand
    • Determines the rating criteria for each factor
    • Calculate an average of those five factor scores to get one SimpleScore

    We break down each of these five factors and their rating criteria for our review of the best mortgage companies.

    Why do some brands have different SimpleScores on different pages?

    Some brands like Bank of America, Wells Fargo, and Chase have different SimpleScores because they offer more than one financial solution — like home loans, auto loans, personal loans and more.

    For instance, in our Bank of America Mortgage Review, we give the company a 3.8 out 5 based on our five rating factors for mortgages. In our Bank of America Auto Loans Review, we give the company a 4.4 out of 5 based on our rating factors for auto loans. By tailoring our SimpleScore to each financial solution, we’re able to give you a more accurate view of a brand’s services and how it compares to competitors’ services.

    Perks

    Mortgage lending companies that provide more perks receive a higher score from us.

    Hard/Soft credit checks

    We know that credit checks affect your score –– that’s why we favor companies that offer soft credit checks or hard credit checks when you want to see your pre-approval rates.

    Customer satisfaction

    We use the J.D. Power 2019 Mortgage Origination Satisfaction Study℠ to find out how customers rate their experience with each company. (If a company is not included in J.D. Power’s study, we skip this rating factor and average the remaining factor scores.)

    Product variety

    Mortgage lenders that offer more products for their home loans are given higher scores.

    Fees

    Fees can add up fast. Companies that don’t require as many fees for your home loan receive a higher score with us.

    Lauren Haas

    Contributing Writer

    Lauren Haas is a freelance writer who covers personal finance, health, and business topics. She’s a serial entrepreneur who enjoys travel, dance, and yoga.

    Reviewed by

    • Angelica Leicht
      Angelica Leicht
      Mortgage Editor

      Angelica Leicht is an editor at The Simple Dollar who specializes in mortgages, mortgage refinancing, home equity loans, and HELOCs. She is a former contributing editor to Interest.com and PersonalLoans.org.