PenFed Credit Union Mortgage Review 2024
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Our Take
3.5
PenFed Credit Union boasts lower-than-average rates, but loan offerings don't go beyond the basics and there are a few hoops to jump through. Custom rates require at least an email address and membership is a must, though everyone qualifies to join the credit union. Most likely to appeal to VA loan borrowers.
Pros
- Offers fully-underwritten preapproval with the option of a 60-day rate lock.
- Average mortgage rates are low compared with other lenders, according to the latest data.
- Originates significantly more VA loans than the average lender.
Cons
- Getting customized mortgage rates requires providing contact information.
- Does not offer harder-to-find mortgages, such as construction, ITIN or USDA loans.
Lender | Min. credit score | Min. down payment | |
|---|---|---|---|
580 | 3% | Visit Lenderat New American Funding at New American Funding | |
620 | 3% | Visit Lenderat NBKC at NBKC | |
580 | 3.5% | Visit Lenderat Rocket Mortgage, LLC at Rocket Mortgage, LLC |
Full Review
Pentagon Federal Credit Union, better known as PenFed, is a credit union based in Tysons Corner, Virginia. Loans are available in all 50 states, though specific product offerings may vary by location.
🏠 Popular loan types include: Fixed or adjustable rate; conventional; FHA; VA; jumbo; rate-and-term and cash-out refinance.
🔑 Specialty loan options include: VA IRRRL.
💵 Home equity borrowing options: HELOC.
PenFed offers a couple of loan add-ons that may help borrowers make more competitive offers. PenFed's Power Buyer Certification provides full underwriting in advance of a mortgage application, showing sellers that a buyer is more or less approved for the loan. Buyers taking advantage of that program are also eligible for a 60-day rate lock.
Home buyers and sellers open to finding a real estate agent via lender referral can take advantage of perks from PenFed's agent affiliate network. Buyers working with a PenFed-affiliated agent can get a credit of up to $1,500 at closing. Using a PenFed agent can qualify sellers for a "Makeover Loan" that has 0% APR for the first six months in order to prep their homes for sale.
» MORE: How to apply for a mortgage
How we score PenFed
Every year, NerdWallet writers and editors use the latest data and independent research to score lenders on an overall rubric, reflecting factors that are most important to mortgage borrowers. Select Why This Category Matters below to learn more.
PenFed Credit Union has a NerdWallet home loans rating of 3.5 stars overall. Here’s a breakdown of this year’s score.
Category | Star rating |
|---|---|
Average mortgage rates and fees | |
Mortgage rate transparency | |
Variety of loan types | |
Customer experience |
- Why This Category Matters
Average mortgage rates and fees (30%)
Our team analyzes federal data to compare mortgage lenders’ origination fees and offered mortgage rates, measuring annual averages across all loan types, as reported by the lenders. The lowest combination of average rates and fees earns the highest star rating in this category. (It’s worth noting that loans considered higher risk, including those such as FHA loans that are easier to qualify for, often have higher interest rates and fees.) Pro tip: In some cases, paying upfront fees may lower a borrower’s mortgage interest rate.
Mortgage rate transparency (25%)
We check how straightforward it is to comparison-shop rates online. NerdWallet’s transparency ratings are higher for lenders that post sample rates on their sites, and highest for sites with self-serve tools that allow shoppers to see what rates might be like for their particular loan. Pro tip: Borrowers who compare customized rate quotes by applying to three or more lenders could save thousands of dollars over the life of their loan.
Variety of loan types (25%)
Finding the right mortgage is different for each borrower. The highest star ratings in this category are awarded to lenders that our research shows offer a wide range of loan types, improving the odds that a borrower will find the best match for their needs: options for purchase and refinance; fixed-rate and adjustable-rate loans; government-backed FHA, VA or USDA loans; renovation or construction loans; and home equity loans or HELOCs.
Customer experience (20%)
How easy is it to interact with this lender? The highest-rated lenders in this category offer features that are convenient and clarifying for borrowers, such as: an online application, multiple customer service options, a helpful mobile app and candid closing timeline communications.
What borrowers say about PenFed Credit Union
NerdWallet’s lender star ratings assess objective qualities, including rates, fees and loan offerings. To help you understand borrowers’ subjective experiences, NerdWallet has gathered customer satisfaction ratings from Zillow and contacted PenFed customer support.
→ Average customer rating on Zillow.
Customer rating: 4.61 out of 5, as of the date of publication. Rating reflects fewer than 100 customer reviews, which is a low number of ratings for Zillow.
🤓 Our Nerds say...
You can get in touch with PenFed online, over the phone or in person, though these resources can be lacking. Branches are only located in a dozen or so states. When we reached out to PenFed via phone and online chat, we had some trouble getting our questions answered and received conflicting information. PenFed has a mobile app, but it's more oriented toward existing customers — you can't use it to start a mortgage application. One other key note: To get a loan from PenFed, you'll need to be a member, which requires opening an account. But that can be as easy as opening a savings account online and depositing $5.
Alternatives to a home loan from PenFed
We recommend comparing mortgage rate offers from three or more lenders.
Navy Federal and Andrews Federal Credit Union are also credit unions that emphasize meeting the needs of servicemembers and veterans.
Veterans United originates the most VA loans in the U.S.
» MORE: Best VA mortgage lenders
More from NerdWallet
NerdWallet’s overall ratings for mortgage lenders are evaluated based on four major categories: average mortgage rates and origination fees, rate transparency to consumers, variety of loan types (purchase, refinance, fixed and adjustable, for example) and customer experience. Among the factors we consider in these categories are: options to apply for home loans online, typical time to close, mobile app experience, level of detail about mortgage rates on lender websites, and NerdWallet’s own analysis of the rates and fees lenders reported in the latest available Home Mortgage Disclosure Act data. These and other items inform detailed rubrics, which generate ratings from 1 star (poor) to 5 stars (excellent). Read more about how we rate mortgage lenders here.
