VA loans, which are supported by the U.S. Department of Veterans Affairs (VA), offer flexible financing requirements, low interest rates, no down payment, and lower closing costs. For those who are currently serving in the military and veterans, these benefits may make homeownership simpler.
The Pentagon Federal (PenFed) Credit Union is a reliable VA mortgage provider through which debtors may also be qualified for a VA mortgage with no down payment. The credit union also offers favorable terms if you want to refinance an existing VA loan.
Continue reading to learn more about PenFed’s VA mortgage products, including rates, loan terms, loan costs, the application process, and customer reviews.
PenFed VA Loans professionals and cons
- Multiple mortgage choices
- Low, flat-rate origination charge
- Low mortgage charges and costs
- PenFed Credit Union membership required
- Little transparency round extra VA mortgage charges
Pros defined
Multiple mortgage choices
PenFed gives a number of mortgage choices, together with typical fixed-rate VA loans and Jumbo VA loans, at aggressive charges. You may also buy low cost factors to additional scale back your rate of interest. The credit score union additionally gives VA Interest Rate Reduction Refinance Loans (IRRRLs) and VA cash-out refinance loans.
Other mortgage merchandise from PenFed embrace Federal Housing Administration (FHA) loans, typical fixed-rate mortgages, jumbo loans, adjustable-rate mortgages (ARMs) and energy purchaser loans for money purchaser financing.
Low, flat-rate origination charge
Origination charges on conventional PenFed dwelling loans are usually as much as 1% of the mortgage quantity. However, for its VA dwelling loans, PenFed fees a flat fee of $995 in origination charges. The value discount is critical: A $400,000 typical dwelling mortgage, for instance, would carry an origination charge of as much as $4,000. PenFed’s VA mortgage origination charge fee would save a borrower simply over $3,000 on this situation.
Low mortgage charges and costs
PenFed gives aggressive charges on its VA loans and mortgage phrases that always do not require a down fee or personal mortgage insurance coverage (PMI). You get to maintain your financial savings, and your month-to-month funds have the next likelihood of being lower than they’d be with different lenders.
Cons defined
PenFed Credit Union membership required
You’ll have to turn out to be a member of the PenFed Credit Union earlier than you possibly can apply for any of its mortgage merchandise. However, becoming a member of the credit score union is straightforward: open a financial savings account with a $5 deposit.
Little transparency round extra VA mortgage charges
While PenFed fees a aggressive flat-rate origination charge for its VA loans, there are nonetheless some charges the borrower is accountable for paying. These charges embrace, however aren’t restricted to, title charges, the price of a credit score report, flood certification charges and appraisal charges. There isn’t any documentation on the PenFed web site relating to the price of any of those charges.
PenFed VA Loans plans/choices
PenFed gives a few of the greatest VA loans, with aggressive rates of interest, low charges and glorious customer support to assist information your monetary choices. In addition to VA buy loans, the credit score union gives two kinds of VA mortgage refinance choices: a extra conventional choice to refinance your present mortgage and one other that allows you to refinance and take out a house fairness mortgage on the similar time. To qualify for PenFed’s VA buy mortgage or mortgage refinancing choices, you may want a credit score rating of 620 or greater.
VA mortgage
PenFed’s VA mortgage charges for its 15-year and 30-year fixed-rate VA loans are significantly decrease than the nationwide common for mortgage charges. They require low-to-no down funds, no personal mortgage insurance coverage (PMI), and no prepayment penalties.
Loan quantities begin at $50,000 and go as much as $726,200, which is the present conforming mortgage restrict set by the Federal Housing Finance Agency. You may also apply for a VA jumbo mortgage for loans starting from $726,201 to $3,000,000. However, VA jumbo loans carry greater charges and stricter eligibility necessities.
VA streamline refinance
PenFed gives two of one of the best mortgage refinance choices for eligible army service members and veterans seeking to refinance present loans. With its VA Interest Rate Reduction Refinance Loan (IRRRL), you possibly can refinance your mortgage to get a decrease rate of interest or higher phrases to decrease your month-to-month funds.
With PenFed’s second choice, the VA cash-out refinance, you possibly can take a house fairness mortgage out whereas refinancing. This is a superb choice for turning your non-VA or building mortgage right into a VA mortgage whereas supplying you with money for dwelling initiatives or consolidating debt, and sometimes with higher phrases than even one of the best private mortgage.
PenFed VA Loans pricing
PenFed VA mortgage pricing is aggressive, with below-market rates of interest and little to no cash down required.
PenFed fees a flat-rate origination charge of $995 for its VA buy loans, which might equate to massive financial savings in comparison with a traditional mortgage origination charge that’s often 1% to 2% of the overall mortgage quantity. Also, per VA-backed dwelling mortgage program requirements, you received’t pay for personal mortgage insurance coverage (PMI) and also you received’t be charged a prepayment penalty should you repay your mortgage earlier than the mortgage time period ends.
Keep in thoughts, nonetheless, that you just’re required to pay the VA mortgage funding charge. If you do not put cash down in your buy mortgage, you’ll probably pay a 2.15% funding charge, in keeping with VA necessities. This funding charge decreases should you put down 5% or extra. The funding charge for VA cash-out refinance loans is 2.15% for first-time refinancing and three.3% after that.
PenFed VA Loans monetary stability
Founded in 1935, PenFed is now the second-largest credit score union within the United States. It had 2.8 million members world wide and $36.6 million in property as of June 30, 2022. In 2021, PenFed introduced in $1.1 billion in income, grew its mortgage lending by 128% and donated $5.5 million to charity, all whereas sustaining a powerful stability sheet and constructive monetary outlook.
PenFed’s monetary merchandise are insured by the National Credit Union Administration, so that you will be assured your investments are protected.
PenFed VA Loans accessibility
You can apply for a VA mortgage and obtain steering from a PenFed consultant by way of PenFed’s web site or by cellphone. PenFed additionally has 46 department places in 13 states, the District of Columbia, Guam and Puerto Rico.
Requirements for VA loans by PenFed usually comply with the requirements set by the U.S. Department of Veterans Affairs. Note that every one VA loans, whatever the lender, require a certificates of eligibility (COE) from the VA.
Availability
PenFed VA loans can be found in every single place within the U.S., together with territories reminiscent of Puerto Rico. However, you have to be a credit score union member to be eligible. Membership will be established throughout the mortgage software course of by opening a PenFed financial savings account with a minimal deposit of $5.
Contact data
PenFed gives 24/7 customer support by its on-line portal. You may also attain a customer support consultant by cellphone Monday by Friday from 7 a.m. to 11 p.m. EST, Saturday from 8 a.m. to 11 p.m. EST and Sunday from 9 a.m. to five:30 p.m. EST.
User expertise
You can apply for prequalification for a VA mortgage by the PenFed Credit Union web site. Once your data has been obtained, a consultant will contact you to debate your choices. If you like to use over the cellphone, you possibly can request a call-back to talk with a mortgage officer.
Note {that a} certificates of eligibility (COE) from the U.S. Department of Veterans Affairs is required for all VA loans, in addition to a house appraisal performed by a VA-approved appraiser. Additionally, PenFed will work with you to decide on a title firm to arrange the closing paperwork and switch possession of the home to you. From begin to end, making use of for a PenFed VA mortgage and shutting on the mortgage usually takes 4 to 6 weeks.
PenFed VA Loans buyer satisfaction
PenFed has an A+ ranking with the Better Business Bureau, however is just not accredited. Additionally, the credit score union has a ranking of 1.18 out of 5 stars based mostly on 242 buyer evaluations. Many of those evaluations point out points with making funds on-line, surprising value will increase on dwelling value determinations and unsatisfactory customer support. However, only some of those complaints reference VA loans; most are centered on different PenFed merchandise, reminiscent of bank cards, auto loans and financial institution accounts.
PenFed VA Loans FAQ
Is it laborious to get a mortgage from PenFed?
It is not laborious to get a mortgage from PenFed by way of the mortgage approval course of. However, PenFed units eligibility necessities for debtors, and these necessities can range by product. For VA loans, lenders usually require a minimal FICO rating of 620. PenFed would not state its minimal credit score rating requirement, however notes that it considers the borrower’s full monetary profile, which incorporates extra components, reminiscent of debt-to-income (DTI) and annual earnings.
PenFed is a good credit score union with an extended historical past of serving army personnel and authorities staff.
Is PenFed Credit Union for the army?
While PenFed’s monetary merchandise are geared towards the army, you wouldn’t have to be a member of the army to hitch PenFed or reap the benefits of its providers.
How we evaluated PenFed VA Loans
When evaluating PenFed, we checked out a number of components, together with:
- VA mortgage choices
- Annual proportion fee (APR) of assorted VA mortgage merchandise
- VA mortgage charges
- Customer service evaluations by way of third-party websites
- Company historical past and monetary stability
Summary of Money’s PenFed VA Loans Review
PenFed is among the many greatest mortgage lenders providing VA buy loans and VA refinance loans: beginning charges are aggressive, and the credit score union’s flat-rate origination charge can save debtors lots of and even 1000’s of {dollars}, relying on the mortgage quantity.
PenFed Credit Union could also be a really perfect lender for a lot of active-duty army personnel, army spouses and veterans. You can apply for prequalification on the PenFed Credit Union web site, after which a consultant will contact you to debate your VA mortgage choices.
