Shopping for a mortgage can be a daunting process. After all, a house purchase is not only one of the largest one you’ll make in your life, the loan can take decades to pay off. And while you can always refinance at a later time, picking the right lender can save you money from day one.
For an online lender that offers a wide range of mortgage products in nearly every state, check out PennyMac. The fees are reasonable and you also get access to your loan officer by phone in addition to easy online tools.
This lender is a great hybrid between online efficiency and personal expertise that’s just a phone call away.
Keep reading to find out more.
Mortgage Application Requirements
Mortgage loans from PennyMac can be originated in any state except New York and may be serviced in any of the 50 states. If you’re shopping for a new purchase home loan and live in New York, you’ll have to look elsewhere. Otherwise, you’re good to go to apply for a PennyMac mortgage.
What else will you need to qualify?
Unlike many other lenders, PennyMac does not have a minimum income requirement. They will, however, look at your debt to income ratio and determine how much of a loan you qualify for based on your other existing debts.
Credit score minimums are based on requirements for each loan type. For example, FHA loans usually require a score of 580. Your PennyMac loan officer can go through each loan type you’re eligible for and refine the list base on your credit as well.
When it comes to qualifying credit history, PennyMac shines in that it will consider your rental payment history as part of your application if it can help you qualify.
Types of Home Loans Available
Many online lenders only offer a few basic mortgage types, which can be limiting for some homebuyers. PennyMac, however, has a wide range of home loans available, which can help you get the best mortgage while still taking advantage of online capabilities.
You can get conventional mortgages that have either a fixed rate or an adjustable rate. These loans typically require at least a 5% down payment. With a fixed rate, your interest rate stays the same through your whole mortgage.
With an adjustable rate, it’ll change at certain intervals based on market rates. You can choose loan terms as short as 10 years or as long as the traditional 30 years.
PennyMac also offers loans that are backed by the U.S. government, including FHA loans and VA loans for veterans and active duty military. Because they’re guaranteed, you can typically qualify with a lower credit score and a smaller down payment compared to a conventional loan.
In fact, VA loans don’t require any down payment at all, while FHA loans start with just a 3.5% minimum down payment.
For refinancing, PennyMac also offers USDA loans for rural areas.
How much can you borrow from PennyMac?
To start off, there’s no minimum loan amount. The maximum varies depending on where you live, the type of loan you receive, and of course your finances, such as your debt-to-income ratio.
Fees and Rates
What kind of fees come with a PennyMac mortgage?
Most notable is that you’ll have to pay a $445 appraisal deposit fee. Most lenders charge this as part of your closing costs so it’s just a matter of when you pay this fee. If you choose a loan that doesn’t require an appraisal, PennyMac does charge a $100 application fee. Still, that fee is later put towards your loan cost at closing.
There are a few upfront costs with a PennyMac loan but as long as you complete the loan process, they probably won’t cost you more than any other home loan.
PennyMac’s Mortgage Process
PennyMac’s Loan Officer Structure
Most people simply work with PennyMac mortgage lenders who are based at call centers throughout the country. However, if you live near a participating location you can talk to a loan officer in person. These call centers are located in the following cities:
- Honolulu, Hawaii
- Henderson, Nevada
- Kansas City, Missouri
- Eagan, Minnesota
Obviously, there’s not a huge geographic range, so don’t expect that in-person customer focus with PennyMac unless you’re lucky enough to live in one of those cities.
When you do call and work with a loan officer, you’ll be placed with one that’s actually licensed to do business in your state (unless, of course, you live in New York). Each loan officer is typically licensed in 14 or 15 states so they’re up to date on all of the most recent regulations both at the federal and state levels.
As an online lender, you can start your mortgage application exclusively online with PennyMac. You can also directly call to speak with a loan officer and completely bypass the online application. If you do fill out the short web form, you’ll still be required to have a phone conversation with your loan officer at some point.
One of PennyMac’s strengths is its easy online tools and resources. Once you’re ready to finalize your application, you can upload all of your supporting documentation directly to your online account. That means you don’t have to worry about snail mail, fax, or emailing sensitive information.
PennyMac also allows you to take advantage of electronic signatures for your loan application. Rather than meeting a loan officer in person, you can sign all of the required application forms and disclosures through the convenience of your own mobile device.
Closing on Your Home Loan
The electronic documentation not only makes the process easier for you, it also helps speed up PennyMac’s closing time. In fact, for a home purchase, you can expect to close between 30 and 45 days. For refinancing your existing home loan, it could take as long as 47 days to close.
Start pulling together your supporting loan documents like tax statements and pay stubs as soon as you start house hunting. That way you can expedite the process right from the get-go.
Like most lenders, your mortgage rate with PennyMac is determined by a wide range of factors, including your credit score and loan type. One of the perks that come with this lender is that you get a free rate lock with your loan. As soon as you reach a certain point in your application process, you get a guarantee on the interest rate you’ve been quoted.
PennyMac may require some upfront payments so you certainly don’t want to go through the full application process unless you’re certain you’ll go through with the home purchase. Other than that, you could benefit greatly from a PennyMac loan thanks to their online loan process, free rate lock, and wide range of mortgage offerings.