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PenFed Credit Union home equity review

Get a line of credit with low closing costs — but you can’t apply online.

This lender only offers one home equity product — a variable-rate home equity line of credit (HELOC). But you can’t apply from the website, and if you’re not planning to draw from the line every year, annual fees come into play.

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Details

Loan products offeredHELOC
Minimum credit scoreThis lender doesn’t list a minimum credit score, but lenders typically require a FICO score of at least 620.
APR range3.25% to 18%
Repayment termsDraw: 10 years
Repayment: 20 years
Loan limits$25,000 to $500,000
State availabilityAvailable in all states

PenFed Credit Union pros and cons

Pros

  • Low closing costs. As long as you keep your account open longer than 36 months, you’re only responsible to pay for an appraisal and notary fees, plus state and local taxes if you live in certain states.
  • Fixed rate option. If you’re willing to draw $10,000 or more, you can take it as a fixed-rate option, locking in the current interest rate and amortizing the draw amount like a loan.

Cons

  • Annual fee. Accounts that haven’t paid $99 or more in interest throughout the year will incur a $99 annual fee.
  • No online application. In order to apply, you have to go into a PenFed branch location or speak to a loan officer over the phone.

What types of fees does PenFed Credit Union charge?

PenFed covers most of the closing costs associated with your HELOC, leaving you responsible for:

  • Appraisal fees, whether or not the loan closes
  • Notary fees
  • $99 annual fee if you haven’t paid $99 in interest throughout the year

If you close your HELOC account within the first 36 months, you’ll have to pay back all the closing costs that PenFed covered.

Members in the following states may be responsible for their own city, county and state taxes:

  • Florida
  • Louisiana
  • Maryland
  • Minnesota
  • New York
  • Tennessee
  • Virginia

PenFed Credit Union requirements

PenFed doesn’t list all of its HELOC requirements online, but you must be a member to apply, and your credit history and debt-to-income ratio (DTI) will be used to determine your eligibility and interest rate. Additionally, your combined loan-to-value ratio (CLTV) can’t exceed 90%, or 80% in Texas and on investment properties.

Documentation

PenFed doesn’t list its documentation requirements for a HELOC application on its website. But you’ll typically want to have the following information available when you apply:

  • Estimate of the property’s value
  • Employment and income information
  • Details about insurance and taxes on the property
  • Your mortgage balance
  • Personal information for you and any co-applicant

How to apply for a home equity loan with PenFed Credit Union

You can apply for a mortgage on PenFed’s website, but the credit union doesn’t offer an online application for its HELOC. You can start the process online by requesting a call back using the steps below.

  1. From the Home Equity page of the PenFed website, select Start Online.
  2. Enter your contact information in the form provided and answer questions about the property.
  3. Choose whether you want to receive texts from PenFed and select Submit Call Back Request.
  4. A PenFed representative should contact you shortly.

What types of home equity products does PenFed Credit Union offer?

PenFed offers a variable-rate HELOC option with interest-only payments throughout the draw period. But you can also choose to take up to three fixed-rate advances of $10,000 or more, which allows you to lock in an interest rate on that money.

Other mortgage products offered by PenFed Credit Union

In addition to its HELOC, PenFed offers these mortgage loan products:

  • Conventional
  • VA
  • Jumbo
  • Refinance
  • First Time Home Buyer Advantage
  • Fannie Mae HomeReady

How PenFed Credit Union’s home equity products compare to other lenders

PenFed offers two options with one home equity product, which allows you to apply once and get the advantages of both a variable-rate credit line and fixed-rate, lump sum advance. But this two-option HELOC isn’t particularly unique among lenders.

And PenFed requires that you take out $10,000 to use the fixed-rate option, which is higher than some other lenders who offer this product — some of which don’t put a limit on how many advances you can take over the life of the draw period.

Compare HELOC lenders

Compare these lenders and lender marketplaces by the type of home equity product you’re searching for, state availability and minimum credit score. Select See rates to provide the company with basic property and financial details for personalized rates.

Name Product Loan products offered State availability Min. credit score
SoFi
(NMLS #1121636)
SoFi
Conventional, Home equity, Refinance
Not available in: HI, MO, NM, NY, WV
620
No hidden fees, multiple loan terms, and member discounts available.
Figure
(NMLS #1717824)
Figure
HELOC
Not available in: DE, HI, KY, MD, NY, SC, TX, UT, WV
620
Speedy prequalification, minimal fees and a wide range of loans and terms with this HELOC lender.
LendingTree
(NMLS #1136)
LendingTree
HELOC, Home Equity loans
Available in all states
620
Connect with vetted lenders quickly through this free online marketplace.
Hometap Equity Partners
Hometap Equity Partners
Home equity investment
Only available in: AZ, CA, FL, MA, MD, MI, MN, NC, NJ, NY, OR, PA, VA, WA
600
Sell a portion of your home's equity for cash without monthly payments or hurting your credit score.
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Compare up to 4 providers

PenFed Credit Union reviews and complaints

This credit union isn’t accredited with the Better Business Bureau (BBB). But as of July 2021, it has an A+ rating for closing 327 complaints in the last three years. PenFed averages only 1.17 stars out of 5 in customer reviews on BBB, but reviews on TrustPilot are more positive. PenFed has a 4.6 star TrustScore rating.

Customers complain of longer than promised closings and poor communications with PenFed representatives, and praise the credit union for its low rates and easy application process.

Our verdict

This credit union’s loose membership requirements and low closing costs make it a good choice for people who want all the features of a variable-rate HELOC and fixed-rate home equity loan in one product. But you don’t want to open the credit line until you’re ready to use it, or you’ll have to pay an annual fee. And you have to be comfortable providing your personal financial information in person or over the phone, because this lender doesn’t offer an online application process.

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