The bottom line: PennyMac excels in online capabilities and makes it easy to shop rates online. Average origination fees are higher than other lenders, and home equity lines of credit and jumbo mortgages were suspended due to the COVID-19 pandemic.
Pros & Cons
- Offers a full range of online capabilities, including e-signatures and online loan process tracking.
- Displays custom rate quotes based on home value, down payment or equity, ZIP code and credit score range.
- Origination fees are higher than the median for all lenders.
- Doesn't currently offer jumbo mortgages or home equity lines of credit.
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PennyMac at a glance:
PennyMac Loan Services caters to the over-the-phone and online borrowers. Most borrowers interact with licensed PennyMac workers located in call centers. PennyMac services the mortgages it originates instead of selling the servicing to a third party.
Here's a breakdown of PennyMac's overall score:
Variety of loan types: 3 of 5 stars
Variety of loan products: 4 of 5 stars
Online convenience: 5 of 5 stars
Rates and fees: 3 of 5 stars
Rate transparency: 5 of 5 stars
PennyMac loan types and products
PennyMac offers a wide range of loan products and types. Fixed-rate mortgages are available for terms ranging from 10 to 30 years. Adjustable-rate mortgage loans are available in 3/1, 5/1, 7/1 and 10/1 terms.
The lender also offers conventional, FHA and VA purchase and refinance mortgages. FHA and VA refinances include streamline options that require limited documentation. USDA Streamline Assist refinance loans are available for borrowers who have PennyMac as their servicer. Cash-out refinances are available for qualified borrowers.
PennyMac mortgages are available for second homes and for self-employed borrowers, who can use documentation including tax history and profit-and-loss statements to qualify.
PennyMac says it has no minimum loan amount, and the maximum loan amount for jumbo loans is typically $2 million, although the lender will consider greater loan amounts case by case. Beginning April 2020, in light of COVID-19 market turmoil, PennyMac "temporarily paused" jumbo lending, an executive said in an email.
PennyMac online convenience
Many customers begin online, using PennyMac's custom mortgage rate quote tool. After looking up combinations of monthly payments, interest rates and discount points, you can start the application (or seek a mortgage pre-approval) in several ways:
Online, by registering and entering information into the digital application.
By calling PennyMac.
By leaving contact information so a loan officer can call.
The secure m.a.c (mortgage access center) portal allows you to submit electronic documentation, including statements from online bank accounts.
"We do encourage our customers to go into the m.a.c portal and do the process there," says Kimberly Nichols, managing director of direct lending, because entering and uploading information online speeds up the process. After the application is complete, a loan officer calls to review the application and provide a consultation.
The loan officer then hands over the file to a member of the My m.a.c Team, who is the point of contact during the mortgage underwriting process. Team members are mortgage experts trained to help borrowers understand the process, says Doug Jones, president of PennyMac Loan Services. The m.a.c portal provides loan process updates online.
Most borrowers prefer to talk to someone during key points in the transaction instead of doing everything online, PennyMac believes. People tend to get mortgages only once every few years, so they look for guidance, Nichols says.
» MORE: Use our mortgage calculator to estimate your monthly payment
PennyMac mortgage rates and fees
One of the most important considerations when choosing a mortgage lender is understanding what the loan will cost. In order to provide consumers with a general sense of what a lender might charge, NerdWallet scores lenders on two factors regarding fees and mortgage rates:
A lender's average origination fee compared to the median of all lenders reporting under the Home Mortgage Disclosure Act. PennyMac earns 2 of 5 stars on this factor.
A lender's offered mortgage rates compared to the best available on comparable loans. PennyMac earns 4 of 5 stars on this factor.
Borrowers should consider the balance between lender fees and mortgage rates. While it's not always the case, paying upfront fees can reduce your mortgage interest rate. Some lenders will charge higher upfront fees to lower their advertised interest rate and make it more attractive. Some lenders just charge higher upfront fees.
You can decide to buy discount points — a fee paid with your closing costs — to reduce your mortgage rate.
Deciding whether to pay higher upfront fees is a matter of considering how long you plan to live in your home and how much cash you have to apply toward closing costs when you sign the loan paperwork.
PennyMac mortgage rate transparency
PennyMac's website allows users to get rate and fee estimates after answering questions about the loan's purpose, the home's value, the amount of down payment or equity, ZIP code and veteran status.
The results page typically shows rate quotes for three loan types and terms, with the interest rate, APR and discount points. Rate results do not include an estimate for closing costs.
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