PennyMac Mortgage Review 2022

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

» MORE: Compare PennyMac to other mortgage lenders

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 in 3/1, 5/1, 7/1 and 10/1 terms.

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.

» MORE: 'Should I buy points?' calculator

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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