About Flagstar Bank Mortgages
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Flagstar Bank (NMLS #417490), a subsidiary of Flagstar Bancorp, Inc., is a full-service mortgage lender that offers a wide variety of purchase and refinance products, including conventional, FHA, VA, USDA and jumbo loans. The company provides loans to borrowers in all 50 states, and you can apply for its mortgages online, in person or over the phone.
- Down payment and closing cost assistance
- Available in all 50 states
- Pre-qualify without a hard credit check
- Little to no fee information online
- Few in-person branches
Flagstar Bank offers its mortgage loan products to a broad range of borrowers. The company caters to first-time homebuyers with several down payment and closing cost assistance programs. You can pre-qualify and check rates without a hard credit check.
Flagstar Bank is somewhat transparent about its starting rates, but you’ll need to request a rate quote online to view these — the company doesn’t post the starting rates for its mortgages on its website. The rate quote request includes a few simple questions regarding your desired loan type (purchase or refinance), home purchase price, loan amount requested, down payment amount and ZIP code.
Over the past three years, Flagstar Bank’s average home purchase rate has been about on par with the national average. In 2019, it was 0.15% higher; in 2020 it was 0.1% higher. In 2021, it was right in line with the national average.
Keep in mind that interest rates depend on various factors, like the borrower’s credit score and debt-to-income ratio. Borrowers with high credit and low DTI ratios typically get the best rates available.
Flagstar Bank offers both fixed-rate mortgages and adjustable-rate mortgages (ARMs). Fixed-rate mortgages provide a predictable monthly payment, while ARMs may offer a low interest rate for a short period of time. Most borrowers prefer the stability of a fixed-rate mortgage, but you may consider an ARM in certain circumstances — for instance, if you plan to sell your home in a few years and can get a low introductory rate. Before you decide, you’ll want to consider your short- and long-term financial goals.
Flagstar Bank Mortgages average home purchase rate vs. national average
|Year||Difference from national average|
Flagstar Bank allows you to pre-qualify online without a hard credit check, and you can check rates and speak to a loan officer before you begin your application. You can also move straight to the loan application and complete it online.
If you’re purchasing, you’ll need to provide information about your estimated purchase price, down payment amount and credit score. Be prepared to answer questions about your assets and income — Flagstar Bank uses this information to determine your loan amount.
If you’re refinancing, you’ll provide information about your refinancing goals, the estimated value of your home and your current loan balance.
For both purchasing and refinancing, you’ll also be required to input your contact information so a loan officer can reach out to you. The company may ask that you upload certain financial documentation, including pay stubs and tax returns.
Once your application is complete, you could receive a preapproval decision in as little as one to two days. Flagstar Bank services its own loans, so you could work with the same company until you decide to sell or refinance.
Flagstar Bank Mortgages application features
|Mobile document upload|
|Physical branches||5 states|
|Publishes minimum rate on website||X|
|Rate lock||60 days|
|Pre-qualification (no hard credit pull)|
|Certified approval letter|
Flagstar Bank offers a wide variety of loans, including conventional (with fixed or adjustable rates), FHA, VA, USDA and jumbo loans. The company also offers specialized loan programs for new construction (with a single-close option for construction-to-permanent) and home renovations. Its loan terms range from eight to 30 years.
Flagstar Bank advertises loans for licensed professionals in specific fields of work. The company’s website doesn’t give details about this type of loan, so you’ll need to contact Flagstar Bank to see if your profession qualifies.
In 2021, borrowers initiated 49,780 home purchase applications with Flagstar Bank. Of those applications, no preapprovals were denied. About 17% of these applications were denied, which is a higher denial rate than the industry as a whole sees (about 8%, as of publishing). Ultimately, about 75% (37,316) of these applications closed.
Loan applications for home purchases only by year
|Home purchase applications||49,780||57,650||55,887|
|Home purchase loans closed||37,316||43,554||42,243|
|Home purchase applications denied||8,623||9,427||9,886|
|Home purchase preapprovals denied||0||0||0|
Over the past two years, Flagstar Bank has seen an increase in the number of refinance loans it originates. In 2021, about 63% of its loans were for refinances and cash-out refinances combined (compared with just 42% in 2019).
This increase in refinance loans wasn’t unique to Flagstar, though; it was an industry-wide trend. When interest rates dropped to historic lows in 2020 and 2021, many borrowers chose to refinance to get a better rate on their existing loans — even small rate decreases can mean significant interest savings over the life of the loan.
Since 2021, rates have been steadily rising to reach 10-year highs. For this reason, fewer borrowers are expected to refinance in 2022.
Home purchase vs. refinance loans by year
|Home purchase loans||33.85%||35.94%||50.93%|
HELOC and home equity loans
The HELOC has a 10-year draw period and a 20-year repayment period. Line of credit limits range from $10,000 to $1 million, depending on your available equity and the loan-to-value ratio. Flagstar Bank lets borrowers choose how they repay their HELOCs, either with interest-only payments or principal and interest payments. With principal and interest payments, you’ll pay off the principal sooner and incur fewer interest charges over the long term.
In most cases, you’ll pay closing costs when you open a HELOC. However, with a Flagstar Bank HELOC, you won’t have to pay a portion of the closing costs if you keep the HELOC open for at least 36 months. The company offers a 0.5% rate discount to borrowers who set up autopay with their Flagstar checking or savings account.
Home equity loans are available in loan amounts ranging from $10,000 to $1 million. Borrowers can choose between 10-, 15- and 20- year loan terms. The company also offers a 0.25% rate discount for borrowers that use autopay from a Flagstar Bank account.
Keep in mind that both HELOCs and home equity loans come with added costs and fees, so you’ll want to consider how and when you would use the funds. A loan officer can help you weigh the pros and cons.
Flagstar Bank doesn’t publish borrower requirements on its site, but typical requirements for a conventional loan include a credit score of at least 620 and a 3% down payment.
Government-backed mortgages, like FHA, VA and USDA loans, typically have lower credit score requirements. Usually, you need a score of at least 500 to qualify for an FHA loan, but you’ll need to offer at least a 10% down payment if your credit score is below 580.
Minimum credit scores for VA and USDA loans are usually set by the lender. You may need a 580 credit score for a VA loan and a score of 640 for a USDA loan. Both options have no down payment requirements.
National mortgage requirements by type
Cost and fees
Flagstar Bank doesn’t publish the fees it charges for loan originations. The company does provide a closing cost calculator on its website, where you can plug in your loan amount and receive an estimate for total closing costs.
After you’ve been preapproved for a mortgage, you’ll receive a much more specific Loan Estimate that outlines every line item of your closing costs, including these lender fees. This estimate is more accurate because it takes into account your specific situation.
Flagstar Bank may charge an origination fee, which is typically 0.5% to 1% of the loan amount. Other closing costs may be appraisal fees, real estate taxes, attorney fees and mortgage insurance premiums. In total, closing costs for a home purchase may account for 2% to 5% of the loan amount.
Flagstar Bank offers various closing cost and down payment assistance (DPA) programs. Some of these include Fannie Mae’s HomeReady and Freddie Mac’s Home Possible loans. The company also provides its own programs, like Flagstar Gift, which gives eligible first-time homebuyers up to 3% or $5,000 to use toward a down payment or closing costs.
Some of these programs are only available in Michigan, so you’ll need to contact a Flagstar Bank representative for more information about eligibility requirements.
- What is Flagstar Bank Mortgages?
Flagstar Bank is a full-service mortgage lender based out of Troy, Michigan. The company originates and services a variety of loan types, including conventional, FHA, VA, USDA and jumbo loans. It also offers home equity loans, HELOCs and refinancing. You can apply for a mortgage loan online, by phone or in person at one of the bank’s branch locations.
- Is Flagstar Bank Mortgages legit?
Flagstar Bank is a legitimate mortgage lender that originated over $34 billion in loans in 2021.
- Where is Flagstar Bank Mortgages available?
Flagstar Bank mortgages are available to borrowers in all 50 states. The bank operates in-person branches in five states: Michigan, Indiana, California, Wisconsin and Ohio.
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I am in tears as I write this review. Flagstar took over as my mortgage servicer in October and they have caused me nothing but headaches and heartache and tears. They did not credit me for all the payments made to the previous service company. I was told it would be fixed. It hasn’t been. Despite filing a complaint with the BBB, sending a Notice of Error and RESPS letter along with proof of all of my mortgage payments, they continue to say I’m delinquent. They have locked me out of my account and stopped sending me mortgage statements so I can no longer view their errors. How is this predatory behavior allowed? I need to find an attorney to take my case and sue them.
I have paid 70% of my original mortgage off, as a reamortization, just a few months after my original loan, and they refuse to remove PMI until I pay $200 fee. Also, after every form I filled out for this process they asked for more information. Poor customer support means I have had to talk to many different representatives in different departments to help me accomplish supposedly simple processes.
They needlessly complicated every single thing I have tried to do. Then I was told they'd review my loan, and all that happened was that they expanded my escrow payments unnecessarily to account for property taxes, which estimate did not include the homestead deduction that is easily found if they actually checked on what the taxes should be. It's all numbers and no personal service I have received so far. Worst bank I've ever dealt with.
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If you have a choice stay away from Flagstar if you plan to re-amortize your loan later on. Their process is horrible, they take 30-90 days after they cash your funds to apply to principle. That is unethical but the bank has the power. Mind you I used a local loan officer who then sold the mortgage to Flagstar so I had no choice in where my loan ended up. They claim to be "holding" your check but you obviously can see the funds cleared from your other account.
Flagstar's customer service is atrocious. I've had our auto-pay set up for over a year. They pulled the money with no problem. I randomly get calls saying we are 2 months behind on payment. They claim my bank rejected the auto pay. I had over $100k in the account. It wasn't the bank or lack of funds it was Flagstar's problem. I call to get it set up on auto-pay again after setting up the account to pay it online manually each month. It gets set up and the same things happen, only this time I watched it.
Customer service says the account number is wrong. I say the same account that I am able to hit submit for payment right now and it will pull? You're saying that account is wrong? They said yes. I submit the payment and again we attempt to set it up on auto-pay with the billing department, and yet again they cannot pull it automatically. I have paid way too many late fees because of their incompetence. If I could refinance and move to another company for the same interest rate, I'd do it. This is a terrible company, and I would never recommend them to anyone.
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