General FAQs

How is the interest calculated on an Adjustable Rate Mortgage (ARM) Loan? What is an Index, margin, and how is it relevant to Adjustable Rate Mortgage loans?
The interest rate is calculated on an Adjustable Rate Mortgage (ARM) by adding the Index + Margin = Your Interest Rate. The index is a benchmark interest rate that reflects general market conditions. The index amount changes based on the market, and is maintained by a third party. The margin is set by the lender when you apply for a loan, and this amount generally won’t change after closing.
What are the Terms & Conditions for Better Rate Guarantee?

The Better Rate Guarantee is our promise to beat a competitor’s rate and/or beat their lender fees. Our promise is subject to the condition that the competitor’s rate does not include any borrower paid or lender paid points, special incentives, limited time offers, or employee discounts. If we are unable to beat a competitor’s rate and/or fees and the borrower does not lock and close their loan with PennyMac, a $250 gift card will be sent to the customer within 4 weeks. The customer will be required to provide a Loan Estimate or Closing Cost Worksheet from the other lender along with an executed purchase contract. This offer expires on 3/31/20.

What are the Terms & Conditions for Close On Time Guarantee?

Gift Card Offer Terms and Conditions

The $500 Visa® gift card offer (Offer) is only available for loans not closed on or before scheduled closing date as set forth in Purchase Agreement (“Scheduled Closing Date”) due to delays caused by PennyMac. Applicants whose loans did not close on or before Scheduled Closing Date due to events beyond PennyMac’s control or due to delays attributable to the customer, an unaffiliated 3rd party vendor or the seller are not eligible for the Offer.

The Offer assumes the purchase contract closing date is at least 30 days (for Conventional loans) or 45 days (for FHA, VA and Jumbo loans) and that you submit a completed application to PennyMac within 5 days of signing your purchase contract. This Offer does not apply if applicable law or investor requirements impose a required waiting period prior to closing and that waiting period prevents or prohibits PennyMac from closing by your Scheduled Closing Date. To be eligible for this Offer, your loan must be locked by 3/31/20.

PennyMac reserves the right to modify these terms and conditions or terminate the Offer at any time. Other terms and conditions, restrictions, or eligibility criteria may apply.

Eligibility Determination

Offer eligibility decisions are made by PennyMac at its sole discretion. Application and property must be eligible for financing as submitted with PennyMac. PennyMac will email a $500 Visa® gift card to eligible applicants within 4 weeks of eligibility decision.


Applicants whose loans did not close on or before Scheduled Closing Date due to events beyond PennyMac’s control or due to delays attributable to the customer, an unaffiliated 3rd party vendor or the seller; Scheduled Closing Date missed due to circumstances outside the control of PennyMac, including inclement weather, natural disaster, catastrophic event, act of terrorism or other public emergency beyond the control of PennyMac. Offer not available for refinance loans, co-ops, unapproved condos, residences under construction and community lending programs.


PennyMac is not affiliated with Visa®. PennyMac’s services and products are neither endorsed nor sponsored by Visa®. Visa® is not a sponsor or co-sponsor of this promotion and is not liable for any alleged or actual claims related to the Offer. Issuer may impose additional terms and conditions. Visa® brand name and logo are registered trademarks of Visa®. Valid where Visa® card is accepted.

Use of Visa® and/or related logos is by permission. All rights reserved. Must be 18 years or older to participate.

What is an ARM Adjustment Period?
An adjustable rate mortgage (ARM) adjustment period is the frequency with which the interest rate may change. The most common ARM adjustment periods are every six months or twelve months. The frequency of ARM adjustments are outlined in the Note.
What is an Adjustable Rate Mortgage or ARM Loan?
An Adjustable Rate Mortgage or ARM loan is a mortgage where the interest rate changes periodically over the life of the loan.
What is an Adjustment Date and Initial Interest rate?
An adjustment date is the day when the interest rate changes on an adjustable rate mortgage (ARM). After an initial period where an ARM loan interest rate remains the same, the rate changes on the adjustment date to reflect the new ARM loan rate. The ARM loan rate will then continue to adjust over the remaining life of the loan as described in your Note. An initial interest rate is the starting interest rate of an adjustable rate mortgage (ARM). This initial interest rate on an ARM loan is fixed for a certain period of time, and then adjusts to reflect overall market rates.
What is an amortization schedule and how can I see it?
An amortization schedule is a schedule showing the effects of making principal and interest payments over the life of your loan as it relates to the loan balance and interest paid. It can be a useful tool to help determine the effects of making more than the required monthly payment, or in observing how much of your payment is applied to the principal reduction versus interest over the life of your loan. You can see your amortization schedule by visiting the Amortization Calculator page of your online account and submitting the needed inputs to calculate your results. For more general information, visit the Home Loan Calculators page.