PenFed Credit Union Mortgage Review 2024

PenFed Credit Union overview

PenFed Credit Union is the second-largest credit union in the U.S. and works with 2.9 million members worldwide. If you’re a member of the credit union and qualify for a mortgage, you can get preapproved online. Notably, you won’t have to pay any lender fees. (PenFed also offers lender credits up to $2,500, depending on the size of the loan.) If you’re a first-time homebuyer, you might qualify for a low-down payment loan or the First Time Home Buyer Advantage program, which rewards you with $500 when you make your 60th on-time loan payment.

Pros and cons of PenFed Credit Union

How Bankrate scored PenFed Credit Union

Affordability: 9.8/10

PenFed Credit Union doesn’t display daily rates online for new purchases or refinances; you’ll need to fill out a form with your personal information to get a customized rate quote. For HELOCs, however, the credit union does share variable rates based on loan-to-value (LTV) ratio and amount borrowed. One big perk: The credit union doesn’t charge any lender fees.

Availability: 9.8/10

PenFed Credit Union operates across the U.S., but you’ll need to become a member to take advantage of its products or services. These include conventional mortgages (both conforming and non-conforming), FHA loans and VA loans. To become a member, you’ll need to establish a savings account with at least a $5 balance.

Borrower experience: 8.7/10

PenFed Credit Union has served its members for decades. It isn’t accredited by the Better Business Bureau, but has received an A+ rating from the organization, albeit along with some negative feedback on the BBB website. On Trustpilot, though, PenFed has received high marks. When evaluating mortgage lenders and testimonials, take into account both the positive and negative experiences. You can apply for preapproval with PenFed Credit Union online, or submit a call-back request to talk to a loan officer. Additionally, you can share more information for a customized rate quote. The PenFed website includes a few calculators to help borrowers estimate monthly payments, along with a knowledge center of educational content for homebuyers.

PenFed’s score was dinged because it requires you to submit contact information before seeing rates, resulting in an 8.7/10.

How to apply for a mortgage with PenFed Credit Union

You can apply for a mortgage with PenFed Credit Union in person at a branch location, online or by phone at 800-970-7766. Here are some tips to prepare for the process:

1. Check your credit report. It’s important to check your credit report before your lender does, in case there are errors that could impact not only whether you get preapproved but also your ability to get the best mortgage rate. Knowing your credit score also helps you decide what type of loan to apply for. If your score is in the very low 600s, you may have trouble qualifying for a loan with PenFed.
2. Gather personal and financial documents. With any lender, you must supply documentation about your income, assets and debts. This includes pay stubs and W-2s and account and loan statements.
3. Provide details about the property. You’ll need to provide the address of the home and submit to an appraisal. (If you’re refinancing, you might or might not need an appraisal.)

Refinancing with PenFed Credit Union

PenFed Credit Union offers rate-and-term and cash-out refinancing options, allowing you to lower your rate, change your loan length and tap your equity. The credit union can be an especially good option for military service members, veterans and eligible spouses since it covers all closing costs on VA interest rate reduction refinance loans (IRRRLs). VA IRRRLs, also known as VA streamlines, are a refinance option for those with VA loans. They allow borrowers to keep their VA loan, but refinance faster with lower costs and fewer hoops to jump through.

• Methodology

  To determine a mortgage lender's Bankrate Score, Bankrate rates lenders on a scale of one (1) to five (5) stars — with five (5) the highest rating — based on a variety of factors relating to the lender's products and services. To assign our ratings, we assessed each mortgage lender across three core areas:

  • Affordability. Annual percentage rate (APR) - 80%; assistance for first-time homebuyers - 10%; down payment - 10%

  • Availability. Loan products - 50%; licensing - 40%; credit score - 10%

  • Borrower experience. Rate transparency - 45%; customer service - 25%; convenience - 10%; days to close - 10%; rate locks - 10%; reputation (bonus)

  Learn more about our methodology.