Business Insider's personal finance team reviewed PenFed's mortgage offerings and found it to be one of the best VA mortgage lenders, particularly for those who are getting a streamline refinance.
PenFed Credit Union Pentagon Federal Credit Union Mortgage offers a variety of mortgages with low average fees. It also offers benefits like a fully underwritten preapproval, and it ranks high in customer satisfaction. But you'll need a good credit score to qualify with this lender.
650
3%
Conforming, jumbo, FHA, VA, HELOC
- Average rates and fees are relatively low
- No-closing-cost streamline refinance
- Offers fully underwritten preapproval
- Offers a 60-day rate lock
- No USDA, new construction, or reverse home loans
- Requires 620 credit score to get an FHA loan
- Need to be a member to get a home loan
- Offers mortgages in all 50 U.S. states, Washington, D.C., Puerto Rico, Guam, and Okinawa
- To become a member, open a PenFed savings account with a $5 minimum deposit
- Does not accept non-traditional credit data, such as utility bills, if you have a low/no credit score
- Minimum credit score and down payment listed are for conforming mortgages. VA borrowers can have scores of 620
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Overview of PenFed Mortgages
Membership Required
PenFed is a credit union, and you'll need to be a member to get a mortgage with this lender. PenFed offers mortgages in all 50 states. It also has some physical branches in a handful of states.
PenFed is one of the best banks and credit unions for military members and their families. But don't have to be affiliated with the military to join. Anyone is eligible for membership as long as you fill out a form and open a savings account with a $5 minimum deposit.
PenFed Types of Mortgages Offered
PenFed offers a variety of home loans, including:
The credit union doesn't have any USDA, new construction, or reverse mortgage options.
You'll generally need to have a good credit score to qualify with this lender. PenFed requires a 650 credit score on its conforming loans, 700 for jumbo loans, and 620 for FHA and VA loans. HELOC borrowers will need a score of at least 680.
To apply for a mortgage with PenFed, you can start the process online or over the phone. You may also be able to get started in person if you live near a branch that offers mortgage services.
Aside from mortgages, PenFed also offers PenFed checking and savings, the Pathfinder Rewards Visa Signature credit card, and PenFed personal loans, as well as PenFed student loans.
PenFed Mortgage Interest Rates and Fees
Average Rates and Low Fees
In our review of Home Mortgage Disclosure Act data, we found that PenFed's mortgage rates are around average compared to other mortgage lenders.
PenFed has a "rates starting at" section on its website, but it doesn't provide any more information about its current mortgage rates on its website or let you explore personalized rates without providing contact information or applying for preapproval.
In 2023, the average borrower getting a conventional mortgage from PenFed paid $2,692 in origination fees, according to HMDA data. This is low compared to other lenders. VA borrowers paid an average of $2,330.
Pentagon Federal Credit Union Mortgage Overall Lender Rating
Loan Types: 3.5 out of 5
PenFed's loan offerings are pretty typical, but they don't have any niche types of mortgages that would suit borrowers with unique needs. It has conventional and government-backed mortgages, plus a HELOC.
Affordability: 4 out of 5
PenFed earns points in affordability for having low average fees on its mortgages and no closing costs on its streamline refinances. Its conforming loan option also allows just 3% down. But its FHA loans require a relatively high credit score compared to other lenders, meaning it's not a great option for borrowers with poor credit.
Customer Satisfaction: 4 out of 5
On TrustPilot, PenFed has a 4 out of 5-star rating, based on over 1,000 online customer reviews.
Trustworthiness: 5 out of 5
PenFed doesn't have any recent public controversies. The financial institution has also received an A+ rating from the Better Business Bureau. BBB ratings indicate whether a company responds efficiently to customers' issues and has transparent business practices.
Pentagon Federal Credit Union Mortgage Pros and Cons
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Underwritten Preapproval and Lock While You Shop
PenFed offers a Power Buyer certification for eligible borrowers, which includes a fully underwritten preapproval. This type of preapproval means the lender has already verified that you have the credit and assets to go through with the purchase, which can help your offer stand out.
As part of this certification, you can also get a 60-day rate lock so you can keep your interest rate the same while you shop for a home, even if there are fluctuations in the market. Ordinarily, lenders won't let you lock a rate until you're under contract on a house.
You'll Need a 620 Credit Score to Get an FHA Loan
According to its website, FHA borrowers will typically need a credit score of 620 or higher to qualify for an FHA loan from PenFed. Many lenders accept scores of just 580 for FHA loans, and some even allow scores down to 500 with a 10% down payment. If you have a lower score, you might need to go with a different lender.
What Borrowers Are Saying About PenFed Mortgages
Business Insider looked at positive and negative customer reviews, online forums, BBB complaints, and other sources to understand what borrowers think about PenFed's mortgage offerings.
Smooth Experience, Helpful Loan Officers
In reviews and online comments, previous borrowers spoke positively about their experiences with PenFed. Many said the process went smoothly and that their loan officers were knowledgeable and easy to get ahold of.
We didn't see any negative comments that suggested a larger issue with the lender.
How PenFed Mortgages Compare
Pentagon Federal Credit Union vs. Navy Federal Mortgages
PenFed and Navy Federal Credit Union are both solid options if you want a lender that emphasizes services and products for military members or families. Navy Federal is one of Business Insider's best mortgage lenders.
Navy Federal is an overall affordable mortgage lender and has multiple zero-down loan options, including one for borrowers who aren't eligible for a VA loan. But it doesn't disclose its minimum credit score requirements.
Navy Federal Credit Union Mortgage Review
Pentagon Federal Credit Union vs. Veterans United
Veterans United is Business Insider's best VA mortgage lender. Veterans United has a ton of experience working with VA borrowers and is the largest lender of VA loans in the country, according to the Department of Veterans Affairs.
Veterans United has similar offerings to PenFed, but it doesn't offer HELOCs.
Veterans United Mortgage Review
Is PenFed Worth It For a Mortgage?
If You're Already a Member
If you're already a PenFed member, it may be worth it to get a quote and see what you might pay for a mortgage from this lender. It's also relatively easy to become a member, and membership is open to everyone.
If You Have a Decent Credit Score
Many lenders offer mortgages that allow credit scores below 620, but PenFed requires decent scores on the mortgages it offers. You'll need a score of at least 620 to qualify for a VA or FHA loan, and the minimum score required goes up to 700 if you want a jumbo loan.
Pentagon Federal Credit Union Mortgage FAQs
You'll have to join the credit union to get a mortgage, but it's easy to become a member — you don't need to be affiliated with the military. To join, open a PenFed savings account with a $5 deposit.
Based on HMDA data, PenFed's rates are around average.
Overall, PenFed mortgage borrowers have positive things to say about their experiences. Many said the process was smooth and their loan officers were extremely helpful.
PenFed doesn't have any specialty mortgage loans, but it does offer underwritten preapproval and a "lock while you shop" option.
If you're a VA borrower, you might want to try another VA-oriented lender, like Veterans United. You can also look at local mortgage lenders or credit unions to see what you qualify for.
Why You Should Trust Us: How We Reviewed Pentagon Federal Credit Union Mortgages
For our review of PenFed's mortgage offerings, we used our methodology for reviewing mortgage lenders.
We look at four factors — loan types, affordability, customer satisfaction, and trustworthiness — and give each a rating between 1 and 5, then we average these individual ratings for the overall lender rating. Lenders get higher ratings if they offer a large number of loan types with affordable features, have positive customer reviews, and don't have any recent public controversies.
