Pennymac Home Equity Loan Review 2024
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Our Take
3.5
Pennymac’s home equity loan stands out for having a range of repayment options and a strong customer support experience. However, borrowers must have a home appraisal and pay closing costs and a $500 application fee.
Pros
- Repayment terms range from 10 to 30 years.
- No penalty for early repayment.
Cons
- Borrowers must pay a $500 application fee and closing costs.
- Home equity loan rates are not posted online.
- Home equity loans aren’t available for second homes.
Lender | Max. loan amount | Max LTV | Min. credit score | |
|---|---|---|---|---|
$400,000 | 85% | 640 | Visit Lenderat Figure at Figure | |
$750,000 | 80% | 580 | Visit Lenderat New American Funding at New American Funding | |
$350,000 | 80% | 680 | Visit Lenderat Rocket Mortgage, LLC at Rocket Mortgage, LLC |
Full Review
Pennymac home equity loan rates and transparency
Most home equity loan interest rates are affected by the movement of a base rate called the prime rate. Your rate will include a margin the lender has added to the prime rate. These margins depend largely on factors like your credit score, your existing debt, your income and the amount you wish to borrow. They will vary by lender.
Current prime rate | Prime rate last week | Prime rate in the past year — low | Prime rate in the past year — high |
|---|---|---|---|
7.75% | 8% | 7.75% | 8.50% |
Unlike some lenders, Pennymac does not post sample home equity loan interest rates online.
Applying for a Pennymac home equity loan
Applicants must have a minimum credit score of 680 and get a home appraisal to qualify for a Pennymac home equity loan.
You can begin an application online or over the phone. If you want to apply online, you’ll fill out a brief form and be contacted by a loan officer before you can move ahead.
Customer service is available via phone. When we called, we were put on a brief hold before being connected with a representative. This agent confirmed that there are no physical branches.
Online chat is also available for registered users who log in.
What you should know about Pennymac home equity loans
Pennymac home equity loans have a maximum borrowing limit of 85% of the value of your home, minus any remaining mortgage balance, a typical limit. Borrowers have repayment term options of 10, 15, 20 or 30 years.
Borrowers must pay an application fee of $500, as well as closing costs. According to the lender, it typically takes less than 30 days to process the loan from the time of application.
» MORE: Best home equity loan lenders
Alternatives to a Pennymac home equity loan
Borrowers who like having their choice of repayment terms may be interested in a home equity loan from Discover.
Home equity loan borrowers who want to avoid application fees and closing costs may be a match for U.S. Bank.
Home equity loans let homeowners access a lump sum by converting equity into debt. You’ll repay the loan at a fixed interest rate over an agreed period of time. Alternatives to a home equity loan include a home equity line of credit (HELOC) or a cash-out refinance.
HELOCs offer greater flexibility to withdraw funds, up to the credit limit, as needed, but often have adjustable interest rates. A cash-out refinance replaces your existing mortgage with a larger loan. It will be most appealing if mortgage rates are lower than your current rate, and closing costs will apply.
Of these alternatives, Pennymac offers cash-out refinancing.
NerdWallet’s home equity loan star ratings are awarded by the editorial team based on the following evaluated factors: maximum combined loan-to-value ratio, available terms, closing costs, application fees, appraisal requirements, interest rate transparency, digital application availability, customer support experience and whether the lender has been subject to government penalties exceeding $1 million.
