Flagstar Bank Mortgage Review

Flagstar Bank at a glance

Flagstar Bank was founded in 1987 and is the third-largest savings bank in the nation, with more than $24 billion in assets. It offers mortgage loans nationally and operates full-service branches in California, Indiana, Michigan, Ohio and Wisconsin.

Flagstar Bank mortgage products

Conventional

• Flagstar offers purchase mortgages with 15- and 30-year fixed-rate terms
• You can find refinance loans, including cash-out refinancing, with Flagstar Bank
• Conventional mortgage requirements involve a minimum 3% down payment and 620 credit score

FHA

• You could get a 30-year fixed-rate Federal Housing Administration (FHA) loan, which offers greater flexibility on credit score and other requirements
• You’ll still need a 3.5% minimum down payment and a credit score of 580 or higher

VA

• Flagstar offers 30-year fixed-rate Department of Veterans Affairs (VA) loans with loan amounts up to $4 million and no down payment or mortgage insurance required
• If you want to refinance your current VA loan, you could also get a streamlined VA interest rate reduction refinance loan (IRRRL)

Home equity

• A Flagstar home equity line of credit (HELOC) allows borrowers to take out amounts between $10,000 and $1 million over a 10-year draw period. There’s a 0.50% interest rate discount for having automatic payments, and the $75 annual fee is waived the first year
• Whether you can get a home equity loan with Flagstar depends on your location

Jumbo

• A jumbo loan is a mortgage that allows you to borrow more than the conforming loan limit in your area
• On primary residences, you could get a purchase, rate-and-term refinance or cash-out refinance loan of up to $3 million
• On second or vacation homes, you could get a purchase, rate-and-term refinance or cash-out refinance loan of up to $2.5 million

Special programs

• Construction loans and remodeling loans. You could build your dream house or make improvements to your current home.
• Down payment assistance programs. Eligible homebuyers could receive up to $7,500 to use toward a down payment or closing costs.
• Federal home loan grant programs. You could receive up to $12,000 to make your home more accessible or complete needed repairs and up to $8,000 to use toward your down payment, if you meet income, age or disability requirements.
• Community Reinvestment Act (CRA) loan programs. These lending programs for buying and refinancing homes, including Fannie Mae HomeReady® and Freddie Mac Home Possible®, typically feature less stringent eligibility requirements.

Flagstar Bank mortgage rates and fees

Rates

Flagstar’s mortgage rates are easy to find on their website. The lender’s rates are competitive, but on the higher side when compared to other large, national banks. On average, Flagstar offered rates to borrowers around 0.74 percentage points above the average prime offer rate (APOR) in 2022. The APOR is a benchmark rate that captures what is, in effect, the lowest APR a bank is likely to offer in the current market. Mortgage loans aren’t typically considered “higher-cost” until they reach 1.5 percentage points over the APOR.

Fees

The average total cost of taking out a mortgage with Flagstar was $6,514 in 2022, according to data from the Federal Financial Institutions Examination Council (FFIEC). That included $3,093 in origination fees, on average.

You can read about mortgage closing costs and what to expect here.

Flagstar Bank’s application experience

If you want to see how much you could borrow and what type of rate you qualify for, you could get a mortgage prequalification with Flagstar.

Once you know the house you want, Flagstar offers an in-person or online application experience. If you prefer to do business face to face, Flagstar’s locator tool lets you look up branches and contact info for loan advisors near you.

Online, the “Apply Now” button takes you to a form asking for loan information, such as how much you’d like to borrow; personal details, such as your name and current address; and your contact information.

How to boost your loan approval odds

Flagstar doesn’t share the exact minimum requirements it uses to approve or deny your application. However, based on nationwide data from 2022, we can say that Flagstar approved customers who — on average — had a 73% loan-to-value (LTV) ratio or better. Most also had a debt-to-income (DTI) ratio below 40%.

In that same year, Flagstar denied about 25% of its mortgage applications. That’s a very reasonable denial rate when compared with other high-volume mortgage lenders. For comparison, other large lenders have denial rates anywhere from the low teens up to the mid-fifties.

Flagstar Bank’s customer service experience

You can live chat with Flagstar Bank or call 855-977-7152 for live customer service help during the following hours:

• Monday-Thursday: 8 a.m. to 10 p.m. ET
• Friday: 8 a.m. to 8 p.m. ET
• Saturday: 10 a.m. to 5 p.m. ET

For loan servicing support, you can call this number anytime: 800-968-7700. You can also email anytime by using a form on Flagstar’s website.

How does Flagstar Bank compare to other lenders?

	Flagstar Bank	PenFed	Mr. Cooper
Lender rating
Minimum credit score	580 to 620	620 to 650	Not published
Minimum down payment	0% to 3.5%	0% to 3.5%	0% to 3.5%
Loan products and programs	Conventional FHA VA Jumbo HELOC	Conventional FHA VA Jumbo HELOC	Conventional FHA VA
Rate spread*	0.74%	0.11%	0.58%

*Rate spread is the difference between the average prime offer rate (APOR) — the lowest APR a bank is likely to offer any private customer — and the average annual percentage rate (APR) Flagstar offered to mortgage customers in 2022. The higher the number, the more expensive the loan.

How we rated Flagstar Bank

LendingTree’s mortgage lender rating is based on a five-point scoring system that factors in several features, including digital application processes, available loan products and the accessibility of product and lending information.

LendingTree’s editorial team calculates each rating based on a review of information available on the lender’s website. Lenders receive a half point on the “offers standard mortgage products” criterion if they offer only two of the three standard loan programs (conventional, FHA and VA). In some cases, additional information was provided by a lender representative.

Flagstar Bank’s scorecard: 5/5

  Publishes rates online

  Offers standard mortgage products

  Includes detailed product info online

  Shares resources about mortgage lending

  Provides an online application