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Pennymac Review: Is It the Right Mortgage Option for You?

May 2, 2025

5 min Read

Written by Andrew Lisa

Edited by Emily Gadd

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Pennymac does not have the name recognition of big banks like Chase or Wells Fargo, or even of some other digital-forward lenders like Rocket Mortgage, but it’s hardly a fly-by-night company. A publicly traded corporation, Pennymac has 15 locations nationwide and is the country’s No. 6 home loan servicer and No. 3 VA loan servicer.

Pennymac is known for customized quotes and unique perks, such as $2,000 toward future refinances, closing bonuses and a 1% rate cut during the loan’s first year. It’s an especially attractive option for those seeking government-backed mortgages, such as FHA and VA loans.

How the Pennymac Mortgage Process Works

The Pennymac mortgage process is similar to what borrowers would experience with most lenders, but it has a few unique tools, perks and features. Here’s an overview.

Step 1: Connect and consult	Reach out to Pennymac and a dedicated loan expert will assess your needs and guide you through the completion of the process. The loan officer will be available throughout until closing to answer any questions and expedite each stage.
Step 2: Prequalification or, preferably, preapproval	Like most lenders, Pennymac offers prequalification, which can take just a few minutes. However, it isn’t as thorough or binding as preapproval, which can take several days, but locks in a rate and loan amount, provided your finances don’t change.
Step 3: Choose your loan type	The buyer and Pennymac expert will select the right kind of loan — conventional, FHA, etc. — according to variables like the borrower’s credit, income and down payment.
Step 4: Underwriting and document submission	Applicants submit required documents through the secure My Home by Pennymac portal throughout the underwriting process.
Step 5: Finalization and closing	With underwriting complete, Pennymac will issue a final loan offer. Upon acceptance, the borrower will sign all required closing documents and pay any associated fees.

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While the process is similar among all lenders, Pennymac offers the following exclusive features that you won’t find anywhere else:

Most lenders require a hard pull, but Pennymac promises preapproval — not just prequalification — without affecting your credit score.
Pennymac’s Lock & Shop program lets you lock in your preapproval rate before you’re under contract — earlier in the process than most lenders allow — and lets you lower your locked rate if interest rates fall.
Pennymac’s special saver program gives you 1% off your rate for the first year, plus $1,000.
Buyers who refinance with Pennymac within the first three years get $2,000 back.

Pros and Cons of Pennymac

Disruptive, digital-forward lenders like Pennymac have a lot to offer — but also some drawbacks to consider.

Pros:

Consistently offers competitively low rates
Quotes are customized and personalized
A wide variety of mortgage options, particularly for government-backed loans
Unique Lock & Shop prequalification offers security but flexibility early in the process
Several exclusive cash-back and temporary rate-reduction perks
High marks for customer service and overall user experience

Cons:

Limited physical locations
Most of the process must be handled online
Origination fees can be comparatively high
No HELOCs
No renovation loans

Pennyman Loan Options

Conventional loans (fixed and ARM)
FHA loans
VA loans
Jumbo loans
Investment property mortgages
Refinance options include fixed, ARM, USDA streamline, FHA streamline, VA IRRRL, jumbo refi and cash-out refi

Pennymac Mortgage Rates and Fees

Pennymac boasts some of the lowest rates in the industry, although it advertises only its fixed rates. Prospective borrowers must contact the company for ARM rates and refinance loan rates.

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Loan Type	Estimated Rate	APR	Points
30-Year Fixed	6.875%	7.274%	0.807%
30-Year Fixed FHA	5.875%	6.797%	0.994%
30-Year Fixed Jumbo	6.0%	6.216%	1.841%
30-Year Fixed VA	6.0%	6.381%	1.841%
15-Year Fixed	5.625%	6.611%	0.852%

Remember that factors like your credit, location, income and down payment will affect your individual rate. While rates can and do change daily, the Pennymac Lock & Shop program lets borrowers secure their rate for 60 days — and even lower it if rates drop — upon preapproval.

Pennymac vs. Other Mortgage Lenders

Here’s how Pennymac stacks up against a familiar big bank and a primary online competitor.

Feature	Pennymac	Chase Bank	Rocket Mortgage
Apply Online	Yes	Mostly, but a conversation with a loan officer is required.	Yes
Fast Preapproval	Moderate. Up to a few days.	No. Can take a week or more.	Varies from minutes to 10 days
In-Person Help	Limited to a handful of locations.	Yes	No
Mobile App	Excellent — 4.9 out of 5 stars after more than 100,000 reviews.	Excellent	Good
Loan Types	Most of the more common options, including conventional, FHA, VA, jumbo, ARM and investment	Most common options, except for USDA loans.	Most common options, plus alternatives like Native American loans and exclusive 1% down loans
Clear Fees	Yes. It lists all fees online clearly and in plain language.	Yes	Yes
Best For	Online buyers and borrowers seeking government-backed loans	First-time homebuyers	Fast, fully online loans

Who Should Consider Pennymac?

Some borrowers will find Pennymac to be the perfect alternative lender — but the company won’t be for everyone.

Best for:

Those willing to accept slightly higher fees for some of the lowest rates in the industry.
Digital-savvy borrowers.
Applicants seeking government loans
Those who plan to refinance with Pennymac within three years.
Investors and USDA refi borrowers — many competing lenders don’t service either.

Not ideal for:

Borrowers seeking face-to-face or in-branch service.
Applicants seeking HELOCs
Borrowers seeking renovation loans

What Real Customers Say About Pennymac

What customers don’t say is as important as what they do. Pennymac boasts an A+ rating from the Better Business Bureau (BBB), indicating that it has a minimal number of unresolved customer complaints.

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Unlike some large banks, such as Chase and Citibank, Pennymac is a BBB-accredited company. Borrowers give Pennymac 4.3 out of five stars on both Credit Karma and Zillow.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

Editorial Note: This content is not provided by Chase. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by Chase.

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