PenFed Credit Union Mortgage Review 2024 (2024)

PenFed is one of the largest credit unions in the country. It's well-known for its loan programs and customer service. It offers a variety of mortgage products, including those with low down payment options and jumbo loans.

First-time homebuyers and those who want some extra hand-holding through the homebuying process will appreciate PenFed's Homes Program, a service that connects borrowers with real estate agents and provides them with a closing cost credit. With the Power Buyer program, buyers can be more competitive in hot housing markets.

Pros Explained

• Multiple mortgage options: PenFed operates multiple mortgage programs, including loans with down payments as low as 3%.
• Lower-than-average rates: PenFed's mortgage rates tend to be lower than the national average, so opting for a PenFed mortgage could help you save money over the long term.
• Rate lock-in program: The Power Buyer program gives you upfront approval that locks in your rates for 60 days. This program can be particularly helpful for those shopping in hot housing markets who may need to make an offer quickly and stand out from other buyers.

Cons Explained

• Does not offer USDA loans: Although PenFed offers VA loans and FHA loans, it doesn't offer USDA loans, a popular type of mortgage that can be used to purchase rural properties with 0% down.
• Application process cannot be done entirely online: While you can start a mortgage application online, the process isn't completely digital with PenFed. You do need to speak with a loan officer to finalize your information.
• Requires contact information to view rates: To view your potential rates and loan options, you must provide your personal contact information. That issue can lead to annoying texts or phone calls when you're just researching your options.

Types of Mortgage Loans Offered by PenFed Credit Union

PenFed Credit Union issues the following mortgage types:

• Department of Veteran Affairs (VA) loans: VA loans are for military veterans, allowing borrowers to buy a home with down payments as low as 0%.
• Conventional fixed-rate mortgages: A conventional fixed-rate mortgage has the same rate for the entirety of the mortgage term. It can be used to buy properties that fall within conventional mortgage limits, meaning the home price can't exceed a certain limit for your area.
• Conventional adjustable-rate mortgages (ARMs): Conventional ARMs can be used to purchase properties that fall within conventional mortgage limits, but the rates can fluctuate as market conditions change.
• Federal Housing Administration (FHA) loans: FHA home loans are for people with smaller down payment amounts or lower credit scores. You can buy a home with as little as 3.5% down with an FHA loan.
• Jumbo loans: If the property you want to buy exceeds conventional mortgage limits, you may need a jumbo mortgage to purchase the home. PenFed finances properties up to $3 million.

PenFed Credit Union Mortgage Loan Features

Through PenFed, you can take advantage of the following benefits and features:

• First-Time Homebuyer Advantage: The First-Time Homebuyer Advantage program is a special program for first-time homebuyers. It allows you to put down as little as 3% of the home's price, and there's no income cap.
• PenFed Homes Program: The PenFed Homes Program is a comprehensive real estate service for homebuyers. It connects you with a network of real estate agents and mortgage experts and you can qualify for up to $1,500 in closing cost credits.

How to Apply for a PenFed Credit Union Mortgage

1. View rates: PenFed allows you to enter some basic details about yourself, such as your name, desired home price, and down payment amount, and view potential loan options. If a loan looks appealing, you can select it to move forward with the loan process.
2. Fill out an application: Fill out a loan application, including details like your Social Security number, employment, and income. You'll also need to consent to a hard credit check.
3. Contact a loan officer: To lock in the listed rates and loan terms, you must speak with a loan officer over the phone or in person. Based on those details, the loan officer will review your application and determine your eligibility for a mortgage. If you qualify, you'll be issued a pre-approval. If you opt for PenFed's Power Buyer program, you can lock in your rate for as long as 60 days while you shop.
4. Find a home: Using the pre-approval, you can narrow down your home search. Once you find the perfect property, you can put in an offer.
5. Apply for a mortgage: If your offer is accepted, the next step is the full mortgage application. The lender will ask for your pay stubs, tax returns, and bank statements to determine your loan details.
6. Schedule an inspection and appraisal: In most cases, you'll need to schedule a home appraisal and inspection before closing the deal. If the home passes the inspection and the appraisal comes back as expected, the bank will work with you and the seller to set a closing date.

PenFed Credit Union’s Rates and Fees

In general, PenFed's mortgage rates tend to be slightly lower than the national average. PenFed issues mortgage loans in all 50 states, and you can view your rates and loan options online.

To view your loan options, you'll need to provide your name, email, and phone number, and you'll have to consent to receive calls or texts from a loan officer. To lock in the quote, you must speak with a loan officer in person or over the phone.

Online Experience

PenFed Credit Union has an easy-to-use website with educational tools and resources. The site provides detailed information about the credit union's mortgage options, articles about the mortgage process, and connections to area realtors.

Although the application process cannot be done entirely online, PenFed's other tools are robust. You can even use calculators to determine how much you can afford and download e-books to help you through the homebuying process.

Customer Service

PenFed is reachable via phone or secure message. The credit union also operates physical branches. You can use the locator tool to find branches and ATMs near you.

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