Pennymac Mortgage Company Review: Is It Any Good?

Get right to it: The review shows that Pennymac is a good mortgage company with reasonable rates, but Benzinga recommends CrossCountry Mortgage as the best lender.

A mortgage application involves a rigorous underwriting process before a lender reaches a decision. The approval or denial of your application is at the lender’s discretion and depends on your financial capabilities assessment. Each lender has a set of requirements, including a down payment and minimum credit score. 

Pennymac Mortgage appeals to potential borrowers needing a lender with nationwide coverage and a convenient, fast online application platform. It is a good mortgage company for you? Read more here to find out.

Pennymac appeals to borrowers looking for an all-online application process with a nationwide presence. However, its limitations are worth considering before you start applying for a mortgage.

• No physical branches or stores: Some people appreciate a fully-online application process because it saves time and is convenient. However, others prefer visiting the store to apply for a loan. So if you like a face-to-face application, Pennymac might not be for you. 
• Limited loan cost information available on its website: Pennymac appeals to customers as an online platform for a mortgage. However, its website provides limited information, which may stop potential clients from applying. 
• Below-average customer service score: First-hand experience from customers tells how the company is doing. Clients of Pennymac have expressed dissatisfaction with its customer service. If after-sales support is a priority to you, you may be able to find a better alternative. 

Benzinga offers the following alternatives for your next mortgage.

Pennymac is a mortgage servicer and lender providing new loans and refinancing products. The company heavily promotes phone and online applications for a fast and easy experience. A loan officer handles your case and will serve as your contact person during the process. It takes an average of 36 days for new home purchases.

• Affordability: Comparing costs from lender to lender is the key to determining affordability. Pennymac has a comparable low annual percentage rate (APR), making it an affordable choice. Its website displays daily APRs, where you can quickly provide your personal and contact information to get a quote.
• Availability: Availability generally refers to how many states Pennymac’s business is in. The company does business across all 50 states. It offers conventional and government-insured loans. Pennymac also offers refinancing and home equity loans. One thing worth knowing is it requires a minimum credit score of 620 for conventional and VA loans and 580 for FHA. 
• Customer experience: Customer experience refers to how pleasant or unsatisfactory a company’s service is. Most people have reported a fast turnaround time in closing the deal within 30 to 45 days. However, its customer service lags a bit, causing frustration for those who need after-sales support on their mortgage. 

• Secure a loan rate for up to 60 days
• Nationwide presence across all 50 states
• Pre-approved loans get $1,000 off closing costs

• High origination fees compared to the competition
• No renovation loans or home equity lines

Qualifications generally depend on the lender. The following is a shared list of lending institutions that Pennymac looks at when reviewing an application.

Your income, property type, credit score, assets and debt-to-income ratio are significant if taking a mortgage loan.

Your household income is among the first things a lending institution will look at in your application. Most will not outright disclose the minimum income requirement for a housing loan. However, your lender needs to your monthly net income  so it can assess if you can afford your mortgage payments.

Lenders will not only consider your salary when assessing your application but other reliable, regular income sources as well, including:

• Income from freelance jobs
• Military allowances and benefits, if applicable
• Child support or alimony payments
• Overtime pay
• Commissions
• Social Security contributions
• Income from investment accounts

A consistent income is what lenders want to see. The income stream should ideally have been running for more than six months. Anything less and your lender may not consider it at all.

What is the property type you are trying to finance? Buying a primary residence is usually the easiest type. It is less risky for lenders, allowing them to extend more to people. If you lose an income stream, you will likely prioritize paying off your mortgage loan among your bills. Some government-backed loans are only valid for a primary residence. 

Purchasing a second or third property will require higher credit, debt standards and down payment. The same applies to investment properties. 

A credit score is a three-digit representation of how reliable a person is as a borrower. A high credit score means you pay your bills in full and on time. It also means you don’t have debt beyond your means. A low credit score means you constantly fall behind your payments or take on additional debt that you cannot afford.

Home buyers with high credit scores have a more favorable chance of getting approved and gaining lower interest rates. Most loan types need a qualifying credit score of at least 620. Benzinga recommends applying for a Department of Veterans Affairs (VA) or a Federal Housing Administration (FHA) loan if your credit score is below 620. 

An FHA loan is government-backed and has lower income, credit score and debt standards. Rocket Mortgage only needs a credit score of at least 580 to qualify for its FHA loan. Making at least a 10% downpayment can bring the minimum credit score to 500 points. However, Rocket Mortgage currently does not offer FHA loans below 580. 

Veterans, active-duty members, reservists and National Guard members can qualify for a VA loan. It requires a credit score of at least 580. 

Having the ability to pay your premiums if you run into financial problems is one of the factors lenders consider. It is where assets come in. Assets are things you own or possess that have value.

Some asset types include:

• Bonds, mutual funds and stocks
• 401(k)s or retirement funds
• Savings and checking accounts
• Certificates of deposit (CD)

Documentation verifying your assets may be required. 

Lenders want to know if you have enough money to cover your monthly mortgage payments. Looking solely at income is insufficient, so the increased importance of the debt-to-income (DTI) ratio rises.

The DTI ratio tells how much of your monthly income goes to paying bills. To compute the DTI, lenders follow these steps:

1. Add all your fixed monthly expenses. These are payments that do not change. Exclude entertainment expenses, health insurance premiums and utilities in the computation.
2. Add all your pre-tax household income. Include all regular and reliable income sources.
3. Divide your total expenses by your total pre-tax household income.
4. Multiply by 100.
5. The result is your DTI ratio.

A lower DTI ratio makes you more attractive to lenders. You need a DTI of 50% or less to qualify for a mortgage loan. 

Mortgage companies have unique features. For example, CrossCountry offers excellent mortgage terms without requiring tax returns. Angel Oak Home Loans only needs you to show your bank statement. Regardless of the case, the following companies are the best in the business.

New American Funding has government-backed and conventional mortgages, making it worth checking out. It also offers refinancing for home equity. If you are from Hawaii and New York, you are out of luck because it does not service these states. Benzinga recommends that self-employed borrowers take a look at New American Funding. Submit your bank statements as proof of income and wait for the next steps of the process. 

The minimum recommendation for a credit score is 640, and the downpayment is 20%. 

• Excellent customer service
• Informative and accurate mortgage calculator

• High minimum credit score of 640
• Available in 48 states, except Hawaii and New York

Rocket Mortgage is famous for its easy and quick online application process. U.S. applicants can get instant income and employment verification, resulting in a fast turnaround time for their loan application.

Rocket Mortgage is among the top lenders in the United States, particularly in mortgage loans. However, you need a minimum credit score of 620 to be eligible. FHA loan applicants need at least 580. The company requires a 3.5% minimum downpayment. It doesn’t offer home equity lines of credit (HELOCs).

Rocket Mortgage is the best choice for almost any buyer type. Its online application is quick and smooth, and it offers excellent service to all its customers.

• Top U.S. mortgage lender 
• Available in several options
• Online application process

• High minimum credit score
• No HELOC
• Limited home equity loan options

CrossCountry Mortgage has a high approval rate across all homebuyer types. It requires no minimum DTI, no income and no employment requirements. CrossCountry also offers conventional loan terms and flexible mortgage plans for up to 40 years terms.

Self-employed individuals have a higher approval rate because they do not need to submit their tax returns. However, CrossCountry requires at least one year of self-employment income history and a 580 minimum credit score. Leveraging your assets will increase your chances of approval.

CrossCountry has a license to operate in the following states.

• No minimum DTI ratio
• 580 minimum credit score requirement
• Several long-term loan offerings
• Works with home buyer assistance programs

• Only available in limited U.S. states

Angel Oak Home Loans is a full-service lender offering non-QM mortgage loans. The company operates in 45 states and offers competitive rates at fast turnaround times. 

• Loan product for townhomes, condos and single-family homes
• Cash-out options are available, depending on your budget
• Bank statements as proof of financial capacity
• Loans up to $3.5 million

• Non-warrantable condominiums not supported

North American Savings Bank offers bank statement-only loans provided you have been in business for several years. You can get approved for as low as $200,000 to $1 million with a 10% downpayment. 

• Available loan up to $1 million
• Competitive, structured interest rates and fees
• Self-employed individuals

Flagstar Bank has online services for borrowers in remote locations. Although the bank has several products, its application process is significantly longer than the competition. 

Some of its mortgage products are the following:

• Conventional fixed or adjustable mortgage
• Community lending options
• Professional loans
• FHA loans
• Specialty loans
• Jumbo loans
• Construction or renovation loans

• Broad loan availability
• Branches in rural locations
• Informative website

eMortgage offers flexible rates depending on your budget and income. It has options for new loans and refinancing. Visit its official website to get a headstart on the application process. 

• Non-QM, jumbo loans are available
• Flexible interest rates

• Different requirements per loan type

M&T Bank focuses on first-time buyers on the east coast. A dedicated loan officer will assist you during the loan application process.

M&T Banks offers several products, including:

• Conventional home loan
• Government-backed loan
• Construction/renovation loan
• VA loans
• FHA loans
• Refinancing

• In-person customer support in its branches
• Several loan options 
• Dedicated loan officer 

• Mid-Atlantic states and Florida branches only
• Not completely online application process

Veterans First is available for anyone affiliated with the Armed Forces of the United States. Its website has a questionnaire form pointing you to the right loan. Some information it needs from you are:

• Your basic information
• Are you refinancing or purchasing a new property?
• Are you retired, a reservist or on active duty?

• New purchases and refinancing 
• Update your interest rate or refinance your loan
• Easy signup process

• Only members or former members of the Armed Forces

Buying a home is a big thing. It is exciting, but several things come with acquiring a property. Consider the following factors when taking out a mortgage loan.

Compare several lenders and their rates to get an overall understanding of the market status. Fixed-rate loans charge a constant rate for the entire term; adjustable-rate mortgages change over the life of the loan.

Your financial situation and needs will influence your decision in selecting a mortgage loan. Some vendors have a minimum downpayment of 20% to qualify. If you cannot afford it, you may need private mortgage insurance, which covers the lender if you default on your payments. Some vendors have a lower downpayment and more flexible payment requirements.

Longer-term loans mean that you pay a lower monthly payment and higher total interest. Shorter-term loans have higher monthly payments but lower interest over the period of the loan.

You can obtain a rate lock from the lender when you find the terms and rates that work for you. It generally takes 30 to 45 days to close the entire transaction. 

In addition to your downpayment, other fees may be required. Request a loan estimate before closing. 

Keep an eye on the following fees:

• Origination fees: These fees cover the processing costs of your loan application.
• Commissions: You, your lender or a combination pay the mortgage broker’s commission.
• Credit report fee: Banks retrieve your credit report as part of the application process. Requesting this report from the credit bureaus is not free.
• Appraisal fee: An appraiser needs to put a value on the home you wish to acquire. A property valuation is a requirement when applying for a mortgage loan. The appraisal fee covers these fees.
• Discounts and points: A borrower can pay a fee to reduce its interest rate. Benzinga recommends reaching out to the lender to meet an agreement. 

These fees impact the overall cost of acquiring a home, so read the fine print before signing with a lender. Some fees need settlement upfront, while others are towards the closing of your loan. A few loan programs allow you to borrow money to cover these fees. The downside is that it will increase your monthly payments. A clear understanding of these fees is critical, so you will know the total amount you will spend.

Request a loan estimate form from the lender to get a full view of the fees associated with your application. Ask questions on things that are not clear.

A few years ago, the entire mortgage application was an offline process, involving a lot of hard-copy paperwork. Many lenders have streamlined the process, moving applications online to save you money.

Online lenders can offer lower fees and interest rates. Why? Because the lender does not have to maintain extra employees and branch locations across the country.

However, if you prefer face-to-face interaction with a lender, Benzinga suggests considering one that offers an in-person application.

The result of your application is dependent on the processing time. You will likely have to wait for appraisals, inspections and other paperwork to close the deal. However, some lending institutions have loan pre-approval, which can speed up the application process even before you start shopping for your new home. Asking your lender about turnaround time should help you set your expectations.

Benzinga has been providing reliable financial information since its inception in 2010. Its mission is to connect the world with reliable facts and news on financial topics.

Mistakes are inevitable, especially for people on their first mortgage. Lapses during the application process can derail the timeline. However, you can avoid delays by doing a few things. Read this section to learn what to avoid when applying for a mortgage. 

When was the last time you checked your finances? Do you regularly check it? Considering your financial status is important because lenders want to know your capacity to afford your monthly payments on the property you wish to acquire. Affordability includes taxes and maintenance costs of acquiring the property.

Make sure your finances are in good shape before applying. Consider the following tips:

• Have enough money to cover the downpayment. In most cases, this is between 10% to 20%.
• Consider the financial feasibility of everyone involved in the loan, including financial obligations. 

Knowing and maintaining a good credit score goes a long way. Do your research on how to find out and improve your credit score.

Part of the qualifications for most mortgage applications is the credit score. A higher score increases your chances of approval and lower interest rates. It also decreases the chances of requiring guarantors or co-signers. A high credit score can make up for deficiencies in your finances, such as low income. Having a low credit score can be the reason for disapproval. 

Beware of the following with regard to credit card accounts.

• Do not open new credit accounts
• Do not apply for other loan types or store cards
• Avoid making large purchases

Do you pay your bills on time? Have you ever had missed or late payments? Missing or late payments impact your credit score, affecting your chances of loan approval. If this happens multiple times or in a pattern, a lender may decide to deny you a mortgage.

How do you prevent it from happening? Pay attention to your statement and due dates. Set a time to review your payments to avoid missing anything. 

Not paying off your credit card does not help your mortgage situation in the long run. Costs will accumulate if you use a credit card for large purchases and not paying in full. Even with low-interest rates, it will eventually add up.