Top perks
Cash offer equivalent
PenFed Mortgage offers a mortgage program called the Power Buyer loan. It's a fully underwritten pre-approval that results in a 60-day commitment to lend, provided none of your details materially change prior to closing. The Power Buyer loan comes with a 60-day rate lock. The rate lock can be extended for an additional 30 days for a fee.
Low down payment home loan options
PenFed Mortgage offers several ways to get a mortgage with a low or no down payment. Those who qualify for a VA loan do not need to make a down payment at all. Low- and moderate-income borrowers can get a mortgage with 3% down. Other borrowers can get a mortgage with 3.5%-5% down.
VA loan experts
PenFed Mortgage has decades of experience serving the global military community.
Membership benefits
As a member of PenFed Credit Union, you will be able to take advantage of all the benefits it offers. Here are just a few examples:
- Car-buying service with free Carfax and TrueCar reports
- Car insurance discounts
- Car rental discounts
- Auto repair discounts
- Tax preparation software discounts
- Home insurance discounts
- Cellphone service discounts
PenFed Mortgage is an industry leader when it comes to low mortgage rates. If you are willing to enter your email address, you can use PenFed Mortgage's convenient rate tool to find out what rate you might qualify for based on the information you provide. You can use this tool to play around with your credit score and down payment amount to see how those details might affect your eligibility. That can help you decide whether it's worth it to wait a few months while you try to improve those numbers before you apply.
The rate quote page will give you a lot of helpful information about how the payment changes, depending on whether you opt to pay for mortgage discount points or ask for a lender credit. Paying for points gets you a permanent discount on your mortgage interest rate. Asking for a credit raises your interest rate, but could cover all or part of your out-of-pocket costs.
Rate lock
PenFed Mortgage's pre-approval comes with a 60-day rate lock. If you need more time, you can extend the rate lock for 30 days one time (for a fee).
Financial incentives
For borrowers getting a loan to purchase a home, PenFed Mortgage offers $1,000-$1,500, depending on the loan size, in lender credits. You need to use PenFed Mortgage's real estate agent to qualify. Not all loans are eligible, so be sure to ask about this before you apply.
What could be improved
Members only
You have to be a PenFed Credit Union member to get a mortgage there. That means you'll have to at least maintain a savings account with the credit union. That might be inconvenient if you weren't looking to open a new bank account. On the plus side, however, the minimum opening balance is just $5, and there is no monthly maintenance fee.
No free float down
PenFed Mortgage's rate lock does not float down. If rates fall before you close on your loan, you will need to pay a fee to get the lower rate.
Higher minimum credit score required on some loans
PenFed Mortgage wants FHA loan applicants to have a 620 credit score, while other lenders allow a 580. Similarly, you need to have a 650 credit score for a conventional loan, while the cutoff for many other lenders is 620.