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Pentagon Federal Credit Union is a nationwide, membership-based financial institution. Unlike many credit unions, PenFed is open to everyone. Once you’ve submitted your membership application and opened a savings account with a $5 minimum deposit — both of which you can do online — you’ll be eligible to apply for a mortgage loan.

PenFed offers a robust lineup of home loans, including conventional fixed-rate loans, jumbo loans, and home equity lines of credit (HELOCs). Members also get discounts on home insurance and title services from the credit union’s partner companies.

In this review:

PenFed mortgage purchase review

Best for:

  • Homebuyers with less cash for closing costs
  • Borrowers with good credit
  • Active duty military and veterans

Pentagon Federal Credit Union mortgages include fixed-rate and adjustable-rate mortgages as well as VA loans and jumbo mortgages.

You can reduce your mortgage rate by paying points, which are advanced interest payments. PenFed’s website clearly discloses loan options with different rates and point amounts, and it also provides highly detailed closing cost information so you can budget accordingly.

Helping to balance out higher rates are PenFed’s lender credits, which reduce your closing costs. The credits are based on how much you borrow:

  • $500 credit for a loan of up to $199,999
  • $1,000 credit for a loan of $200,000 to $699,999
  • $2,500 credit for a loan of $700,000 or more

PenFed mortgage loans also have no lender fees. Considering the savings on the origination fee alone — which is typically 1% of the loan amount — plus the lender credit, cash-strapped buyers might be willing to pay a higher rate if it means bringing less cash to closing.

Mortgage programsConventional, VA, jumbo
Fixed-rate loan terms10, 15, 20, 30 years
Adjustable-rate loan terms3/1, 5/1, 7/1, 10/1, 15/1
Rates and fees
  • Rates depend on loan type, loan amount, and your creditworthiness
  • No lender fees
Min. credit score
  • Conventional: 650
  • VA: Contact lender
  • Jumbo: 700
Min. down payment
  • Conventional: 3%
  • VA: $0
  • Jumbo: 20% to 35%

Pros and cons of buying a home through PenFed

There are plenty of reasons to select a PenFed home loan, and a few caveats as well.

Pros

  • Lender credits
  • No lender fees
  • Highly transparent loan estimates
  • Online mortgage pre-approval

Cons

Credible isn’t affiliated with PenFed, but we make shopping for a home loan and finding a great mortgage rate easy — you can compare all of our partner lenders and see prequalified rates in as little as three minutes.

Credible makes getting a mortgage easy

  • Instant streamlined pre-approval: It only takes 3 minutes to see if you qualify for an instant streamlined pre-approval letter, without affecting your credit.
  • We keep your data private: Compare rates from multiple lenders without your data being sold or getting spammed.
  • A modern approach to mortgages: Complete your mortgage online with bank integrations and automatic updates. Talk to a loan officer only if you want to.

Find Rates Now

PenFed mortgage refinancing review

Best for:

  • VA loan borrowers
  • Homeowners who want to change the rate and/or term of their mortgage
  • Homeowners seeking a cash-out refinance

PenFed has mortgage refinance options for conventional loans, jumbo loans, and VA loans. The site’s Get My Rates tool lets you experiment with various loan types and terms as well as different cash amounts in the event you’re looking for a cash-out refinance.

One notable option is the VA streamline loan. Also known as an Interest Rate Reduction Refinance Loan (IRRRL), this product allows current VA loan holders to refinance to a lower rate quickly without the need for an appraisal.

You can roll closing costs into the loan too, and PenFed will even cover the VA funding fee.

The refinance application process is the same as for home purchase loans. You can apply for pre-approval on the website, but you must talk to a loan officer to get the ball rolling on your application.

Mortgage refinance programsConventional, VA, jumbo
Fixed-rate loan terms10, 15, 20, 30 years
Adjustable-rate loan terms3/1, 5/1, 7/1, 10/1, 15/1
Rates and fees
  • Rates depend on loan type, loan amount, and your creditworthiness
  • Some closing costs waived for VA streamline refinance
Min. credit score
  • Conventional: 650
  • VA: Contact lender
  • Jumbo: 700

Pros and cons of refinancing through PenFed

PenFed mortgages offer nice perks to homeowners looking to refinance. But it’s important to understand the credit union’s limitations as well.

Pros

  • Good variety of adjustable-rate loan terms
  • No lender fees
  • Some closing costs waived on VA IRRRL refinances
  • Transparent rates and closing costs

Cons

  • No FHA options
  • Can’t begin a mortgage application without talking to a loan officer

How does PenFed stack up?

If you’re a veteran looking for mortgage products, consider Veterans United. The lender has a full roster of VA loans, and it offers FHA and USDA loans as well.

PenFed mortgage reviews like this one go a long way toward helping you decide if the lender is a good fit for your needs. But don’t apply before you’ve explored all your options.

Shopping around for mortgage rates takes time, but Credible can help. As an online mortgage broker, we make it easy to compare personalized rates and loan information from several lenders so you can be sure you’re getting a great deal.

Keep Reading: 13 Tips for First-Time Homebuyers: Your Must-Know Advice

 


The company above is one of Credible’s approved partner lenders. Because they compete for your business through Credible, you can request rates from them by filling out a single form. Then, you can compare your available options side-by-side. Requesting rates is free, doesn’t affect your credit score, and your personal information is not shared with our partner lenders unless you see an option you like. Credible receives compensation if you close a loan with one of our partner lenders. The rates you receive and the fees you pay (if any) are not impacted by this compensation.

About the author
Daria Uhlig
Daria Uhlig

Daria Uhlig is a contributor to Credible who covers mortgage and real estate. Her work has appeared in publications like The Motley Fool, USA Today, MSN Money, CNBC, and Yahoo! Finance.

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