Flagstar Bank Mortgage Review 2024
580 to 620
0% to 5%
Conventional, FHA, VA, USDA, jumbo, home equity loans, HELOCs
- Offers in-person and remote service
- Wide variety of loan products available
- Includes loans to nontraditional borrowers
- Above-average loan costs
- Poor customer service reputation
- Few branches outside of select states
Flagstar Bank mortgage overview
A longtime player in the mortgage space, Flagstar was first chartered as a federal savings bank in 1987 and acquired by New York Community Bancorp Inc. in 2022. It currently operates as a mortgage lender nationwide, but it only has brick-and-mortar branches in nine states.
Just a few years into its acquisition by New York Community Bancorp, Flagstar is continuing to undergo major changes. In July 2024, the bank announced it was selling its mortgage servicing business to Dallas-based mortgage servicer, Mr. Cooper. However, Flagstar still plans to offer new home loans to retail and private wealth customers.
- Areas of service: Nationwide for digital service; Michigan, Indiana, Ohio, Wisconsin, New York, New Jersey, Florida, Arizona and California for in-person banking.
- Digital service: An online application and remote home loan advisors are available.
- Headquarters: 102 Duffy Avenue, Hicksville, NY 11801
- Website: Flagstar.com
Flagstar Bank rates, terms and fees
Rates
Flagstar’s online rate comparison tool is easy to use. Borrowers only have to enter basic loan information and a ZIP code to get customized rate estimates for a broad list of mortgage products.
However, rates for Flagstar mortgages run high compared to loans from similar mortgage lenders. In fact, the difference between average Flagstar mortgage rates in 2023 and the average prime offer rate (APOR) was more than twice that of some competing lenders, according to Home Mortgage Disclosure Act (HMDA) data.
What’s more, the spread between the bank’s average rate and APOR –– a benchmark rate that captures the lowest rate a lender is likely to offer –– has jumped in recent years. From 2022 to 2023, the average spread for all Flagstar home loan types rose from 0.74 percentage points to 1.11 percentage points. For context, a mortgage is considered “higher priced” if there’s a 1.5 percentage point difference between the APR and APOR.
Fees
Flagstar’s fees are more competitive. In 2023, Flagstar charged an average origination fee of $3,820, according to HMDA data. That amount is only slightly above average for a big national lender, and it also beats the fees charged by some competitors that offer lower rates.
However, Flagstar loans are still fairly expensive overall. The total loan cost for all home loan types from Flagstar averaged $8,073 in 2023, according to HMDA data. That’s nearly $800 more than the average amount charged among 31 different lenders.
You can get a more recent estimate of the fees Flagstar charges by using the bank’s online Mortgage Closing Cost Calculator.
What discounts does Flagstar Bank offer?
Homeowners who sign up for automatic payments using a Flagstar deposit account may qualify for a quarter-point rate discount on a home equity loan or a home equity line of credit (HELOC). Flagstar also offers several down payment assistance programs for low-income and first-time homebuyers, including the Flagstar Gift Program and the Flagstar Power Up Program.
What types of mortgage loans does Flagstar Bank offer?
Flagstar Bank offers a variety of home loans including:
Conventional loans
Flagstar offers conventional loans that include fixed-rate mortgages, adjustable-rate mortgages and cash-out refinances.
Conventional loan qualification requirements
- 620 minimum credit score
- 5% minimum down payment
FHA loans
For those home buyers with lower credit scores or smaller down payments, Flagstar offers loans guaranteed by the Federal Housing Administration (FHA), including FHA fixed-rate and FHA adjustable-rate loans.
FHA loan qualification requirements
- 580 minimum credit score
- Borrowers with little or no credit history may also be eligible
- 3.5% minimum down payment
VA loans
Flagstar offers mortgages for active-duty service members and veterans who may qualify for a mortgage backed by the U.S. Department of Veterans Affairs (VA). Loan options include a VA 30-year fixed rate or a VA adjustable-rate mortgage.
VA loan qualification requirements
- 580 minimum credit score for most mortgages
- Borrowers with little or no credit history may also be eligible
- No down payment required for qualifying veterans
- No mortgage insurance required
USDA loans
Low and moderate-income mortgage applicants who plan to live in a rural area may qualify for a loan backed by the U.S. Department of Agriculture (USDA).
USDA loan qualification requirements
- 580 minimum credit score
- Borrowers with little to no credit history may also be eligible
- No down payment required
Jumbo loans
Flagstar offers jumbo loans to borrowers who are planning to purchase a more expensive property. Borrowers may qualify for a jumbo loan as large as $800,000 to $3,500,000.
Jumbo loan qualification requirements
- 700 to 740 minimum credit score
- 10% minimum down payment
Home equity loans and home equity lines of credit
Select homeowners can also apply for a $10,000 to $1 million fixed-rate home equity loan from Flagstar with a 10-, 15- or 20-year repayment period. In addition, Flagstar offers a home equity line of credit (HELOC) with a 10-year draw and a 20-year repayment period.
Home equity loan and HELOC qualification requirements
- Home equity offers are only available through retail bank branches and are not offered nationwide.
Flagstar Bank mortgage qualifications
| Credit score minimum | 580 to 620 |
| DTI ratio Debt-to-income (DTI) ratio compares your monthly gross income to your monthly debt payments. maximum | Conventional: 45%FHA: 43%VA: 41%USDA: 41% |
| Down payment minimum | Conventional: 5%FHA: 3.5%VA: 0%USDA: 0% |
Don’t know your credit score? Get your free score on LendingTree Spring today.
How to boost your loan approval odds
Compared to some well-known mortgage lenders who approve over 70% to 90% of applicants, Flagstar is relatively selective. According to HMDA data, Flagstar approved 69.6% of applicants in 2023 across all loan types. Among the applicants it approved:
- Nearly half (46.4%) had a debt-to-income (DTI) ratio below 40%.
- Most borrowers had strong down payments, and the average loan-to-value (LTV) ratio was 74.9%.
How to apply for a Flagstar Bank mortgage
1. Choose your loan type
Head to www.Flagstar.com. Click “Borrow” next to the Flagstar logo. Then click on the “Explore home loans” button on the left. Scroll down until you see your loan options.
2. Get prequalified
Obtaining a quick prequalification will give you a general idea of how much mortgage you can afford. But a mortgage preapproval is more exact and lasts for 90 days.
3. Submit a loan application
If you click the “Apply now” button on Flagstar’s “Buy a Home” page, you’ll be given the option to fill out an application online or contact a Flagstar loan advisor.
Documents you’ll need for prequalification or preapproval
- Identification
- Tax documents
- Bank statement
- Pay stubs
- Debt and asset statements
- Gift letters (if you’re using gifted funds)
Find out more about how to apply for a home loan.Is it safe to get prequalified with Flagstar Bank?
Yes. Unlike a formal credit application, prequalification typically uses a soft credit check to assess your creditworthiness so your credit score won’t be affected. It can be a useful tool for setting a budget before you start home shopping.
Flagstar Bank’s customer service experience
Flagstar isn’t widely beloved for its customer service, according to TrustPilot and Better Business Bureau (BBB) reviews. However, the lender does offer some nice perks for mortgage customers who like to bank remotely. For example, applicants can choose to meet with a home loan advisor digitally or in person if they live near a Flagstar branch.
The mortgage lending office is open from 9 a.m. to 8 p.m. ET Monday through Thursday and from 9 a.m. to 7 p.m. ET on Friday. Saturday hours are from 10 a.m. to 3 p.m. ET.
- Phone: 844-451-8720
- Email: Reach out via the email form on Flagstar’s website.
How does Flagstar compare to other lenders?
|  |  |
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|---|---|---|---|
| LendingTree’s rating | Back to our Flagstar Bank summary | ||
| Minimum credit score | 580 to 620; "No credit score" loans available | 580 to 620; "No credit score" loans available | 580 to 620 |
| Minimum down payment | 0% to 5% | 0% to 5% | 0% to 5% |
| Rate spread 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) the lender offered to mortgage customers in 2023. The higher the number, the more expensive the loan. | 1.11% | 0.30% | 0.73% |
| Loan products and programs |
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|
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| Better for: | Lower income and nontraditional borrowers without a Social Security number or with limited credit history. | Financially comfortable borrowers who have previously lived "a debt-free lifestyle." | First-time homebuyers and digitally savvy borrowers with great credit. |
Read our Flagstar Bank vs. Churchill Mortgage
Like Flagstar Bank, Churchill Mortgage also offers loans to borrowers without a credit history. However, Churchill Mortgage markets its manually underwritten “no score loans” to homebuyers who can afford to live “a debt-free lifestyle” or who have already paid off earlier debts. Churchill’s loan products also have lower interest rates, on average, according to HMDA data.
Flagstar’s specialty products, by contrast, are largely aimed at first-time homebuyers and repeat borrowers without much available cash. Flagstar also advertises a wider variety of loans for nontraditional borrowers, including one for borrowers without a Social Security number.
→ Read more in our full Churchill Mortgage review.
Flagstar Bank vs. Rocket Mortgage
A pioneer in e-closings, Rocket Mortgage is also a good choice for borrowers who prefer to bank remotely. But unlike Flagstar, Rocket Mortgage boasts a strong reputation for customer service, making it a better fit for those who need more hand-holding or value quality service.
Plus, Rocket Mortgage has previously offered lower rates, on average, according to HMDA data, so borrowers with excellent credit could get a better deal. On the downside, Rocket Mortgage doesn’t offer nearly as many loan options as Flagstar.
→ Read more in our full Rocket Mortgage review.
Ready to compare lender offers on LendingTree? Get Your Rates TodayHow LendingTree 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:
Publishes rates online
Offers standard mortgage products
Includes detailed product info online
Shares resources about mortgage lending
Provides an online application
= 0 points = 0.5 points = 1 point
Frequently asked questions
Flagstar offers plenty of credit education and financial management tools on its website, including dozens of financial calculators.
Yes, Flagstar Bank boasts more than 35 years of experience in the mortgage lending business and is one of the largest mortgage originators in the country, according to National Mortgage News.
You can view more info about Flagstar Bank’s state licenses and registrations through the Nationwide Multistate Licensing System and Registry (NMLS) website.
Taking out a mortgage could ding your credit score in the short-term. But credit scores typically improve over time if you remain current with your payments.
Flagstar offers a solid range of standard and specialty mortgage products. But be aware: the bank has earned a poor reputation for customer service. On TrustPilot, for example, mortgage customers complain about poor communication, slow response times and administrative errors. But Flagstar currently has an B- rating with the BBB and was recently ranked 25th out of 36 mortgage servicers in J.D. Power’s 2024 U.S. Mortgage Servicer Satisfaction Study.
The bank is in the process of selling its mortgage servicing business to Texas-based loan servicer, Mr. Cooper, though. So Flagstar customers’ previous mortgage experiences may not be indicative of what new borrowers can expect.