Flagstar Bank Mortgage Review: Detailed Analysis of Rates, Fees, and Mortgage Options

Founded in Michigan in 1987, Flagstar Bank is a licensed mortgage lender that operates nationwide. Prospective homebuyers can apply online, via phone, or in person at one of its 400 physical branches across nine states.

Flagstar Bank offers many home loan options for first-time and repeat buyers, including conventional, FHA, VA, and jumbo loans. Construction, renovation, and other specialty loans are also available. The lender also provides mortgage refinancing and home equity solutions like a home equity line of credit (HELOC).

Before choosing a lender, it’s important to shop around and compare your options. Learn more about Flagstar Bank’s mortgage offerings, customer service, and fees in this comprehensive review.

Best for: Rate shopping and multiple loan types

Rate shopping: Flagstar Bank lets you compare current mortgage interest rates across different home loans before you apply. Simply input the home purchase price, borrowing amount, down payment, and zip code. You’ll then receive an estimate of your interest rate, annual percentage rate (which includes the interest and lender fees), monthly payment amount, and mortgage insurance. You can also compare refinancing rates this way.

Multiple loan types: Flagstar Bank offers a variety of fixed-rate and adjustable-rate mortgage loans, including conventional loans, jumbo loans, and government-backed FHA, VA, and USDA loans. The lender also has specialty loan programs, such as construction and renovation loans, community lending programs, and professional loans for lawyers, CPAs, and other professionals. Streamline refinancing, cash-out refinancing, and HELOCs are also available.

Methodology 

To determine the best mortgage companies, Credible evaluated lenders based on several different categories: rates and fees, reputation, eligibility, efficiency, customer experience, and discounts and perks. We also looked at the types of loans offered by each lender for research purposes only, they did not factor into the overall score. We assigned a score out of five stars to each lender based on our findings. 

Learn more about our expert lender ratings by checking out our Mortgage Lender Rating Methodology.

Flagstar Bank: Pros and Cons

What to consider before applying

Each mortgage loan from Flagstar Bank has its own eligibility criteria, rates, and terms. Before applying, compare each one to find which works best for you.

You’ll also want to get the best interest rate possible. To do that, you’ll generally need good credit. Flagstar Bank mortgage rates can also vary by state, home purchase price, down payment amount, and other factors.

Unless you qualify for a VA or USDA loan through Flagstar Bank, you’ll also need some money set aside for a down payment. Even then, you may still need 3% to 4% of the home purchase price for closing costs.

Be sure to calculate your homebuying budget, too. Use an online mortgage calculator to find out what you can afford each month based on factors like the loan amount, repayment term, and interest rate.

How to apply for a loan with Flagstar Bank

1. Prequalify online. Use Flagstar’s PreQual Express tool to find out how much house you can afford and your potential rates. You’ll need to provide information about your income, assets, credit, and debts. This won’t hurt your credit score.
2. Get pre-approved. A home loan specialist will reach out to you about your application and financing options. They’ll also answer any questions you might have along the way. You can meet them remotely or at a physical branch near you. You’ll need to provide some documents for pre-approval. Pre-approval lasts for up to 90 days.
3. Wait for the underwriting process. Your application will move into the underwriting — or “loan review” — stage. If you meet the requirements, you’ll receive a conditional approval.
4. Get the final approval. Once you find a home you want to buy, you’ll need to provide the property details to Flagstar. They’ll review everything and issue a final approval decision.
5. Head to closing. If approved, you’ll get scheduled for closing. At closing, you’ll sign any mortgage documents and pay any upfront payments — like closing fees and the down payment.

How to qualify for a loan with Flagstar Bank

Flagstar Bank doesn’t specify its home loan requirements, but here’s what you’ll typically need to qualify for a mortgage:

• 50% maximum debt-to-income ratio (DTI)
• 600 minimum credit score (depending on loan type)
• 2 or more years of steady income
• Down payment (some loans come with 100% financing)

You may also need to provide identifying documents, like a driver’s license, indicating your residency status. Some of Flagstar’s down payment assistance programs and lender discounts have their own requirements.

When in doubt, reach out to one of the lender’s loan advisors. They should be able to answer any questions you have, including the minimum requirements for any loans you’re considering.

How to refinance with Flagstar Bank

If you already have a mortgage loan, either with Flagstar Bank or another lender, you may be able to refinance it. Refinancing could get you lower monthly payments, a better interest rate, or quick access to cash.

Flagstar Bank offers a cash-out refinance and a VA interest rate reduction refinance. If you’d prefer another way to access your home equity, the lender also provides HELOCs. These range from $10,000 to $1 million, depending on your creditworthiness and how much home equity is in your property.

Before refinancing your home loan, run some calculations. Flagstar has several resources you can use, including a home loan refinance calculator and a mortgage payoff calculator. Run some calculations to see if refinancing is right for you. If it is, you can apply online. Or you can reach out to a loan advisor who will walk you through the process.

How Flagstar Bank compares