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PennyMac Mortgage Review
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.
PennyMac mortgage loans at a glance
|30-year fixed-rate||2.50% to 4.375% (excluding autopay discount)|
|Product variety||Conventional (10 to 30 years)|
FHA (10 to 30 years)
VA (10 to 30 years)
Fixed-rate and ARM loans
|Fees||Origination 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
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
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.
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.
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
- PennyMac warns mortgage originators that forbearance buybacks could be coming in a story from October 2020. The nation’s largest mortgage aggregator says it may force repurchase after 15 days.
- In October 2020, President & CEO of Pennymac Financial Services Inc sold 30,000 shares of PFSI on 10/08/2020 at an average price of $60.18 a share. The total sale was $1.8 million.
Read: Best Refinance Rates
Compare top mortgage lenders
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