Refinancing

money in your house

What is mortgage refinancing?

There are many reasons people refinance their mortgage but the most common ones are to save money on their monthly bill or over the life of their loan.* However, some people also take advantage of refinancing to shorten the length of their mortgage or get some of their equity out of their homes to cover other expenses.

Regardless of why you're thinking about refinancing, it's important to weigh all your options and come up with a strategy that makes sense for your personal financial goals.

*By refinancing your existing loan, your total finance charges may be higher over the life of the loan.

Found your dream home? Here are some great reasons to work with PennyMac:

  • Low, everyday rates
  • FHA, VA, Jumbo and flex-term options available
  • A top 11 lender in the U.S.
  • A publicly traded, national lender with more than 3,000 employees (NYSE:PFSI)

Refinancing Loan Options

PennyMac Loan Services offers you the flexibility you need when considering your refinancing options. We offer loan products for primary residences, second/vacation homes and investment properties. Some of our most popular options include:

Mortgage Type
Key Benefits
Worth Considering If You…
Mortgage Type
Conventional Fixed-Rate Mortgages

The lowest fixed interest rates for eligible buyers.

Rates & More Info
Key Benefits
  • The best fixed rates
  • Your rate never changes for the life of your loan
Worth Considering If You…
  • Plan to stay in your home for a longer period of time
  • Have good credit
  • Possess the funds for the required down payment
Mortgage Type
Adjustable-Rate Mortgages (ARMs)

The lowest rate for the first 3-10 years of the loan for eligible buyers. After the initial term, your rate will adjust based on current rates and may increase.

Rates & More Info
Key Benefits
  • The lowest short-term rates
  • The lowest monthly payments for at least the first term of the loan
Worth Considering If You…
  • Think you’ll be moving before being exposed to the risk of higher rates
  • Have good credit
  • Possess the funds for the required down payment
Mortgage Type
Jumbo Mortgages

A larger loan for high credit score borrowers with healthy reserves.

Rates & More Info
Key Benefits
  • Loan amounts up to $2 million
  • Eliminates the need for secondary financing
  • No prepayment penalties (even on ARMs)
Worth Considering If You…
  • Have good credit
  • Owned the home more than 6 months
  • Want to avoid multiple loans
Mortgage Type
FHA Mortgages

Loans with low down payment requirements and flexibility for borrowers with certain kinds of credit problems.

Rates & More Info
Key Benefits
  • Low down payments
  • Less strict qualification guidelines compared to some other loans
  • Option of fixed-rate or ARM loans
Worth Considering If You…
  • Lack a good credit history
  • Don’t have the funds available for a larger down payment
Mortgage Type
VA Mortgages

Government-backed loans offered exclusively to our valued members of the military.

Rates & More Info
Key Benefits
  • Low or no down payment
  • No mortgage insurance requirement
  • Flexible qualification guidelines
  • Option of fixed-rate or ARM loans
Worth Considering If You…
  • Are an active military member or veteran
  • Are the surviving spouse of a deceased service member who lost their lives in military service
Mortgage Type
USDA Mortgages

Loan program for individuals or families who plan to occupy a single-family home in a designated rural area as their primary residence.

Rates & More Info
Key Benefits
  • No required down payment
  • Competitive rates on fixed-rate loans
  • Flexible qualification guidelines
  • No maximum purchase price
Worth Considering If You…
  • Live in a designated rural area
  • Don’t have the required funds for a down payment
  • Don’t have good credit history
Mortgage Type
Flex-Term Mortgages

Loans that allow you to set the term length.

Rates & More Info
Key Benefits
  • Refinance without extending the length of your loan
  • Set your own pay-off date
Worth Considering If You…
  • Want to take advantage of a lower rate but don’t want to extend the length of their loan
  • Would like their loan to sync up with a specific date, like their retirement

Why should I choose PennyMac?

We service the loans we originate — While other lenders may be looking to sell your loan as soon as you sign the dotted line, PennyMac is dedicated to being a lender you can trust far beyond your closing date. When you originate a loan with PennyMac, we'll service your loan because we value your trust and decision to choose us.

No expensive brick-and-mortar retail offices — We believe in passing on the savings to our customers with some of the lowest, most competitive rates and fees available today. Home loans are the primary focus of our business, not upselling you and adding services you don’t need.

We're committed to being your partner in homeownership — Being a PennyMac customer means having a partner that never stops looking for ways to save you money and help fulfill your dream of homeownership.

Resources & Tools

Get a Customized Rate Quote

Tell us the type of loan you’re looking for and we’ll quote you a rate and estimate your monthly payments. When you like what you see, get pre-approved with PennyMac’s BuyerAdvantage Pre-Approval or apply online using our Mortgage Access Center (m.a.c).

Refinance Loan Calculators

Use today's rates to get a better understanding of the true cost of different mortgage products before chatting with one of our licensed loan officers.

Mortgage Learning Center

We’re always adding new articles and resources to our Learning Center to help provide you with unbiased, useful mortgage information on a wide range of topics.

Home Value Estimator

Get a report on the estimated value of your home that provides two estimated market values from leading providers.

Accreditations and Certifications
PennyMac Trustpilot Reviews PennyMac Loan Services Reviews PennyMac Loan Services NerdWallet scores PennyMac Loan Services BBB Reviews

Frequently Asked Refinancing Questions

How often can I refinance my home?

Limitations on refinancing can vary from state to state so you’ll want to check the regulations for the specific state where the property is located. Another factor to weigh is payoff fees, which are different from prepayment penalties. While prepayment fees are meant to prevent you from paying off additional principal, an early payoff fee is a fee paid to the originating lender for loans that have only been on the books a few months. Your loan officer can tell you which types of loans carry these kinds of restrictions.

How much does it cost to refinance?

There are many options for managing closing costs for different kinds of refinance loans. Regardless of whether or not you receive closing credits from your lender, you often have the option of folding closing costs into your loan to avoid having to put up cash at closing. You may hear that 1.5% of your loan amount is a good rule of thumb for closing costs but it is always best to ask your loan officer about all your options.

PennyMac also offers a refinance calculator to see if refinancing your home can help you lower your monthly payment or consolidate your debt. This is a great place to start as you weigh costs against benefits.

How long does it take to refinance a mortgage?

Many refinance loans can take 30-45 days to close but there are lots of exceptions if your finances are complex or you’re refinancing at a particularly busy time of year.

There are, however, steps you can take to limit your exposure to delays. Much of the documentation that you’ll need to provide for processing can be determined as soon as you know what kind of loan you will be applying for. Collecting and scanning documents like tax returns and income verification is a good start and can save you time during your application process.

What is equity? Why is it important for refinancing?

Equity is the appraised value of your home minus the amount you still owe on your loan. This is an important factor for refinance loans that require a minimum loan-to-value (LTV) percentage and for cash out refinances where you want to take a specific amount of cash out of your existing equity.

If you’re interested in estimating the current equity in your home, PennyMac has created a Home Value Estimator to help. To determine your estimated equity, just subtract the outstanding balance of your loan from the estimated value of your property and you will have a great starting point for determining what types of refinance loans will work for you.

What documents are required to refinance?

Your documentation is what shows our underwriters that you’re a good fit for the loan you’ve selected. Here is a list of some of the most common documents that your loan officer may ask for:

  • Proof of income – You will generally be asked to provide pay stubs for the past 30 days in order to verify income. Self-employed borrowers may be asked for different documentation.
  • Copy of homeowners insurance – Verifying that your property is insured, or will be insured, is important to all lenders.
  • Copies of your W-2 forms – Providing your W-2 forms will give your lender a much broader picture of your financial picture.
  • Copies of asset information – Lenders are required to verify that you have the funds available to cover various expenses of the loan. You may be asked for statements for accounts that hold money for closing costs, statements for savings, statements for checking and 401(k) accounts and investment records for mutual funds or stocks.
  • Copy of title insurance – A copy of your title insurance is important to help your lender verify your taxes, names on the title and the legal description of the property.

Your lender will also need to pull your credit report as a part of the refinance process, so have your Social Security number handy when it’s time to apply.

Will a refinance help get rid of my PMI?

In many cases, yes. As rates have dropped and home values have risen, many homeowners have an opportunity to remove their PMI while reducing their overall monthly payment. Talk to your loan officer about the specific requirements of the loan products that you qualify for.

Keep in mind that many loans have a 'seasoning requirement' that requires you to wait at least 2 years before you can refinance to get rid of PMI. So if your loan is less than 2 years old, you can request that your PMI be removed with a new refinance but you're not guaranteed to get approval.

What refi options are available to me if I have bad credit?

There are many loan types that cater to borrowers with sub-optimal credit. The best way to find out about all your options is to let a loan officer pull your credit and explain the benefits of different programs to you.

What is a Streamline Refinance?

Streamline refinancing was created to expedite the process of obtaining a new loan by referencing existing paperwork and data on a borrower. The process is not only faster but also easier on the borrower since it eliminates the need to provide full documentation, like you would for a standard conventional loan.

Opting for a streamline refinance can be a viable option for borrowers who want a lower interest rate or need to transition from an adjustable rate mortgage (ARM) to a fixed-rate loan. Both the FHA and VA offer beneficial streamline refinancing programs to qualifying borrowers.