Pennymac Mortgage Review 2022

Good for: borrowers seeking a conventional or government-backed mortgage, or who want to rate-shop online.

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Our Take

4.5

NerdWallet rating 

The bottom line:

Pennymac excels in online capabilities and makes it easy to shop rates online. Average origination fees are on the higher end, and home equity lines of credit and jumbo mortgages were suspended due to the COVID-19 pandemic.

Pennymac
Min. credit score
620
Min. down payment
3%
Loan types and products
Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA
Learn more

at Pennymac

Pros & Cons

Pros

  • 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.

Cons

  • Origination fees are on the higher end, according to the latest federal data.
  • Doesn't offer jumbo mortgages or home equity lines of credit.

Compare to Other Lenders

NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Min. credit score

620

Min. credit score

620

Min. credit score

620

Min. down payment

3%

Min. down payment

3%

Min. down payment

3%

Loan types and products

Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA

Loan types and products

Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA

Loan types and products

Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA

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Full Review

Tap to learn how COVID-19 has affected mortgage shopping

The coronavirus pandemic introduced some new challenges to getting a mortgage. Many lenders facing high loan demand and staffing issues increased their fees, adjusted minimum required credit scores or temporarily suspended certain loan products. While some products and business practices have returned to pre-pandemic levels, you might still find delays and limited options. If you can’t pay your current home loan, refer to our mortgage assistance resource. For information on how to cope with financial stress during this pandemic, see NerdWallet’s financial guide to COVID-19.

Pennymac at a glance

Pennymac Loan Services caters to 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: 4 of 5 stars

  • Ease of application: 5 of 5 stars

  • Rates and fees: 2 of 5 stars

  • Rate transparency: 5 of 5 stars

Pennymac mortgage loan types

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.

The lender offers conventional loans as well as purchase and refinance mortgages backed by the Federal Housing Administration and the Department of Veterans Affairs. 2020 Home Mortgage Disclosure Act data shows an average origination fee of $854 for FHA loans, which is below the median.

FHA and VA refinances include streamline options that require limited documentation. USDA Streamline Assist refinance loans, which are backed by the U.S. Department of Agriculture, 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 on a case-by-case basis. (Beginning in April 2020, in light of COVID-19 market turmoil, Pennymac "temporarily paused" jumbo lending, an executive said in an email. Jumbo options have not resumed, the lender confirmed in spring 2021.)

Pennymac ease of application

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 preapproval) 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, senior 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, according to Pennymac. 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, according to the most recently available Home Mortgage Disclosure Act data:

  • Pennymac earns 1 of 5 stars for average origination fee.

  • Pennymac earns 3 of 5 stars for offered mortgage rates compared with the best available rates on comparable loans.

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.

More from NerdWallet

at Pennymac

Methodology

NerdWallet’s overall ratings for mortgage lenders are evaluated based on four major categories: variety of loan types (purchase, refinance, fixed and adjustable, for example), ease of application, rates and fees and rate transparency. Among the factors we consider when scoring these categories are options to apply for and track loans online, the level of detail about mortgage rates on lender websites and our analysis of the rates and fees lenders reported in the latest available Home Mortgage Disclosure Act data. These scores generate ratings from 1 star (poor) to 5 stars (excellent).