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PennyMac Review

PennyMac offers the typical terms for conforming purchasing mortgages: 15- and 30-year fixed-rate mortgages and a 5/1 adjustable-rate mortgage (the number before the slash refers to the fixed-rate term, after which the rate is adjustable annually).

For

  • A nonbank lender, PennyMac offers a range of FHA mortgages and participates in the USDA mortgage program (for rural homes), in addition to providing conventional loans. It has an online application process, but loan officers are readily available by phone as well.

Against

  • This small lender’s rates are about the same as the big banks’, but there are only 14 brick-and-mortar branches if you need to see someone in person.

PennyMac offers the typical terms for conforming purchasing mortgages: 15- and 30-year fixed-rate mortgages and a 5/1 adjustable-rate mortgage (the number before the slash refers to the fixed-rate term, after which the rate is adjustable annually). The lender is more flexible than most on the debt-to-income (DTI) ratio for borrowers, accepting 50 percent ratio in some cases. Jumbo mortgages for purchase options are a 30-year fixed-rate loan or 5/1 and 7/1 adjustable-rate loans. For the latter, borrowers with a credit score above 700 with nine to 12 months of reserves and a 20 percent to 25 percent down payment can get a loan for up to $2 million.

PennyMac is one of the few national lenders to offer USDA loans, a program that lets buyers with low or moderate incomes, lower credit scores and a higher DTI get a mortgage in certain rural areas. Existing USDA borrowers may refinance with PennyMac’s USDA Streamlined Assist to reduce their monthly payments. The lender also promotes its VA and FHA products for purchase and refinancing.

Rates and Fees

The PennyMac site appears to advertise its rates for all of its loans on one easy-to-read page, but be aware that those rates assume the purchase of a full discount point. Even with that point, its rates are about the same as Wells Fargo’s and slightly cheaper than Chase’s. The site makes little mention of what its closing costs are, so those will vary according to the loan.

Customer Experience

PennyMac opened for business in 2008 – a strange time indeed to be a mortgage lender – and it appears to be striving to adapt to its customers’ needs. It maintains an A+ rating from the Better Business Bureau (while many large banks have battled failing grades), and had an above-average score on J.D. Power’s 2017 customer satisfaction survey.

Though it has 14 physical locations and a phone center open late into the evening, the company encourages the use its online mortgage access center for everything from prequalification to application. It is licensed to lend to buyers in all states except New York.