Pennymac Review 2024: Are They a Good Fit? (2024)

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Pennymac is one of the largest mortgage lenders in the U.S. It offers a good range of loan types, low average rates, and flexible term length options for refinancing. But it ranks low in J.D. Power's latest satisfaction study, and borrowers have complained about the lender's customer service when it comes toloan servicing.

Pennymac Mortgage Basics

Pennymac is an online lender that originates mortgages in all 50 U.S. states.

Loan Types

Pennymac offers the following types of mortgages:

• Conforming loans
• FHA loans
• VA loans
• USDA streamline refinances
• Jumbo loans
• Home equity loans
• Investment property mortgages

Pennymac also has flexible term length options for borrowers who want to refinance without changing the duration of their loan.

This lender's jumbo loan amounts go up to $3 million.

Pennymac Mortgage Interest Rates and Fees

In our review of Home Mortgage Disclosure Act data, we found that Pennymac's mortgage rates were slightly below average.

Pennymac makes it convenient to compare current mortgage rates. On its website, you can view today's sample rates or use its tool to get rates customized to your situation. These customized rates are based on the type, price, and location of the property you want to buy, your down payment,and your credit score.

In 2022, the average borrower getting a conventional mortgage from this lender paid $5,178 in origination charges, according to HMDA data. This is a bit high compared with other lenders.

Pennymac Overall Lender Rating

Loan Types: 4 out of 5

Pennymac's loan offerings should meet most borrowers' needs. It has conventional and government-backed mortgages, plus home equity loans. But if you're looking for a more niche type of loan, like a construction loan, you'll need to look elsewhere.

Affordability: 3.5 out of 5

Pennymac offers multiple low down paymentoptions, including 3% down conventional loans and government-backed loans that allow between 0% and 3.5% down. It also has rates that are slightly lower than average. But it doesn't have any specialty mortgage products or features (like down payment assistance) that help it stand out in affordability.

Customer Satisfaction: 2.68 out of 5

In J.D. Power's 2023 Mortgage Origination Satisfaction Study, Pennymac ranked below the industry average. However, the lender has a 4.36 out of 5-star rating on its Zillow profile, based on over 300 online customer reviews.

Trustworthiness: 5 out of 5

Pennymac has an A+ rating from the Better Business Bureau. BBB ratings are based on a company's response to customer complaints, honesty in advertising, and transparency about its business practices.

Pennymac Pros and Cons

Flexible Term Lengths for Refinances

Pennymac offers flexible terms on its mortgage refinances, meaning you can choose how long you want to take to repay your loan.

The most commonterms for mortgages are 30 years and 15 years. Some lenders may offer a few additional term options, such as 20-year or 10-year mortgages. But say you're refinancing and you have 24 years left on your current mortgage. While you could refinance into one of these available term lengths, moving into a longer term means you'll likely spend more on interest, while moving into a shorter term may come with a higher monthly payment. With Pennymac, you could potentially refinance into a new 24-year mortgage.

'Lock While You Shop' Option

Pennymac offers a feature called Lock & Shop, which lets you lock in your interest rate while you're still searching for a home. Most lenders won't let you lock your rate until you're under contract to purchase a home. But lenders like Pennymac that offer a "lock while you shop" option enable borrowers to lock in their rates when they get preapproved and ensure they don't have to worry about rate fluctuations while they shop for homes.

You can lock your rate for up to 90 days with Pennymac.

Low Customer Satisfaction Ranking

In J.D. Power's annual Mortgage Origination Satisfaction Study, which measures customer satisfaction, Pennymac ranked below the industry average. The lender does have good online customer reviews on its Zillow page, so you may still have a good experience with this lender.

What Borrowers Are Saying About Pennymac

Business Insider looked at positive and negative customer reviews, online forums, BBB complaints, and other sources to understand what borrowers think about Pennymac's mortgage experience.

Convenient Process With Good Communication

Many of the reviews we looked at talked about how smooth the process with Pennymac was. Previous borrowers spoke positively about the lender's easy-to-use digital tools and their communicative loan officers.

Pennymac as a Loan Servicer

Pennymac is also a large mortgage servicer. Servicers are the companies that borrowers make their monthly mortgage payments to after closing. Often, you'll make your initial payments to the same lender that you got your mortgage from, but after a while they might sell your loan to another servicer.

There are many complaints online from borrowers who had their loan servicing sold to Pennymac. Complaints about mortgage servicers aren't uncommon, especially when the borrower's escrow is recalculated and their monthly payment goes up as a result (this happens when your insurance or taxes increase, and isn't something the servicer can control).

There's not much you can do if your mortgage servicing is sold to a company that has poor reviews. But keep in mind that borrowers are more likely to complain when they have an issue than write a positive review when their payments are processed successfully month after month. So bad reviews don't necessarily mean you should worry if your loan ends up getting sold to Pennymac.

Compare Pennymac to Other Mortgage Lenders

Pennymac vs. Rocket Mortgage

To get personalized rates from Rocket Mortgage, you'll need to start an application. Pennymac, on the other hand, lets you easily explore rates without having to apply or create an account first.

Rocket Mortgage ranked No. 2 in J.D. Power's satisfaction study, while Pennymac ranked below average. If customer service is important to you, Rocket Mortgage might be a better choice.

Rocket Mortgage Review

Pennymac vs. LoanDepot

LoanDepot doesn't list any rates online, making it difficult to compare this lender to others if you aren't ready to apply for preapproval. By contrast, Pennymac's rate quote tool makes it easy to get an idea of what your rate might look like.

LoanDepot requires a minimum down payment of 5% on its conforming loans, while Pennymac allows down payments as low as 3%. LoanDepot's and Pennymac's average rates are comparable, but LoanDepot's fees are slightly lower.

LoanDepot Mortgage Review

Pennymac FAQs

Why You Should Trust Us: How We Reviewed Pennymac

For our review of Pennymac, we used our methodology for reviewing mortgage lenders.

We look at four factors — loan types, affordability, customer satisfaction, and trustworthiness — and give each a rating between 1 and 5, then we average these individual ratings for the overall lender rating. Lenders get higher ratings if they offer a large number of loan types with affordable features, have positive customer reviews, and don't have any recent public controversies.