Flagstar Mortgage Review for 2022

Flagstar mortgage rates

Mortgage interest rates and fees vary from lender to lender, so it’s important to know your options and comparison shop. This can increase your purchasing power and reduces your loan costs (both monthly and over the life of the loan).

On average, Flagstar’s mortgage rates are comparable with other lenders. In 2021, the average 30-year mortgage interest rate with Flagstar Bank was 3.19 percent. This was middle of the road compared to other top lenders like Rocket Mortgage (Quicken Loans) and Wells Fargo.

Average mortgage rates at major lenders

Flagstar Bank Rocket Mortgage Wells Fargo Freedom Mortgage
Avg 30-Yr Interest Rate, 20211 3.19% 3.00% 3.14% 2.66%
Median Total Loan Costs, 20211 $4,280 $4,670 $3,600 $3,880
Median Origination Fee, 20211 $1,500 $2,430 $1,330 $0

Average rate and fee data sourced from public rate and fee records required by the Home Mortgage Disclosure Act (HMDA).

Remember, averages are just a benchmark. Your own rate could be higher or lower depending on your circumstances. So get a custom quote to find out.

Flagstar Bank mortgage review for 2022

Flagstar operated as a federal savings bank and mortgage lender based in Troy, Michigan until 2021 when it was acquired by New York Community Bank. Although, the financial institution has kept its Flagstar name.

Flagstar Bank provides its customers with a diverse range of mortgage products to fit their individual needs. This includes conventional loans, adjustable-rate loans, fixed-rate loans, and jumbo loans.

In addition, borrowers can choose from multiple government-backed mortgage options — including VA, FHA, and USDA — which typically involve low or no down payment. These types of loans often make it easier for some people to purchase or refinance a home, including first-time homebuyers and low-to-moderate income borrowers.

Conventional and government loans aren’t only for home purchases and loan refinancing, though. You can also use these mortgage programs to fund home renovations or construct a new home.

Flagstar also offers multi-property loans, allowing real estate investors to acquire properties using conventional financing.

Homeowners who are looking to pull cash from their home equity can apply for a cash-out refinance or use a home equity line of credit (HELOC) or a home equity loan. Unfortunately, home equity solutions are limited to certain geographical areas.

Working with Flagstar Bank

Flagstar Bank’s mortgage application process is straightforward. You can apply online, over the phone, or in-person at a branch.

To get started, request a mortgage quote for comparison purposes, and then complete an application. Be prepared to provide the lender with supporting documentation, such as:

  • W2s, 1099s, and tax returns for the last two years
  • Pay stubs for the last 90 days
  • Bank statements for the last 60 days
  • Statements for other income sources
  • Drivers license

The lender will check your credit history and review your supporting documentation, then issue a conditional mortgage approval. You’ll receive a full Loan Estimate once you have a signed purchase agreement.

The underwriting process involves scheduling a home appraisal, researching the title, and verifying that you’ve met all requirements of your conditional approval. You’ll receive your Closing Disclosure statement (with your actual mortgage terms) about three days before closing.

For your convenience, Flagstar Bank has an online portal for applicants to upload their documents. There’s also an eClosing option for borrowers who don’t live near a Flagstar branch.

Flagstar mortgage customer reviews

Compared with other financial institutions, Flagstar Bank has relatively few complaints lodged with the Consumer Financial Protection Bureau (CFPB). In 2021, Flagstar had less than one complaint for every 1,000 mortgages.

Overall, homeowners seem satisfied with the level of service they receive from Flagstar. Many state their loans closed on time, typically within 30 to 45 days.

Additionally, mortgage rates and closing costs were lower than expected for several borrowers according to online reviews.

CFPB Complaints, 20214 Complaints Per 1,000 Mortgages, 20215 J.D. Power Satisfaction Score, 20216
Flagstar Bank 86 0.42 822/1,000
Rocket Mortgage 376 0.24 876/1,000
Wells Fargo 488 0.58 832/1,000
Freedom Mortgage 262 0.35 829/1,000

On the downside, Flagstar only received an 822 out of 1,000 in J.D. Power’s most recent mortgage customer satisfaction survey. That was well below the average score of 848.

This suggests not every customer had a glowing experience. But, as always, service varies by person and location.

Mortgage loan products at Flagstar Bank

According to a Flagstar Bank representative, available home loan programs (along with their minimum requirements for approval) include:

  • Conventional loans: Buy a home with a down payment as low as 3%. To qualify for a conventional loan, Flagstar requires a minimum credit score of 620. Use a conventional loan for a new home purchase, a refinance, new construction, home renovation, or buying a multi-unit property
  • FHA loans: These home loans are backed by the Federal Housing Administration and require a 3.5% down payment and a minimum credit score of 600. Use FHA financing for a new purchase, refinance, construction, or home renovation. Keep in mind that this type of mortgage requires mortgage insurance premiums (MIP) for the life of the loan
  • VA loans: These loans backed by the U.S. Department of Veterans Affairs cater to active-duty military, veterans, National Guard service members, Reservists, and their eligible spouses. To qualify, you need a minimum credit score of 600. This is a no-money-down loan
  • USDA loans: This mortgage loan is insured by the U.S. Department of Agriculture. To qualify, you must buy a home in an eligible rural area. These loans require no money down, but you need a minimum credit score of 640
  • Jumbo loans: Borrowers can use a jumbo loan to purchase or refinance a high-balance home (a property that exceeds the conforming loan limit set by Freddie Mac and Fannie Mae, which is currently $ in most parts of the country). Flagstar allows loan amounts of up to $3 million for primary residences and $2.5 million for second homes

Note that Flagstar Bank’s mortgage credit score requirements are a little higher than some other lenders. It requires a score of at least 600 for an FHA loan, while many companies go as low as 580.

If you are hoping for FHA financing with a FICO score in the 580-600 range, you’ll have to look elsewhere.

Refinancing with Flagstar Bank

Homeowners who are looking to refinance their mortgage can choose between a rate-and-term refinance or cash-out refinancing.

  • Rate-and-term refinance: Exchanging your original mortgage with a new one that offers loan terms that are more favorable
  • Cash-out refinance: Access your home equity by replacing your current mortgage with a new, larger loan amount, and then receiving the difference as a lump sum of cash

Alternatively, Flagstar borrowers who need to tap their equity but don’t wish to refinance can apply for a second mortgage — a home equity loan or HELOC — in select states.

Where can I get a mortgage with Flagstar Bank?

Flagstar Bank only has branches in select states: Michigan, Indiana, California, Wisconsin, and Ohio.

However, the lender is licensed to originate loans in all 50 states and Washington D.C., and it works with thousands of third-party mortgage originators, loan officers, and loan advisors.

If you live in a state without a Flagstar branch location, you can manage your mortgage payment online through MyLoans, the lender’s online servicing center.

Is Flagstar the best mortgage lender for you?

If you’re looking for a conventional loan, government loan, jumbo loan, or perhaps a renovation or new construction loan, Flagstar Bank may have a mortgage loan program for you.

The lender offers competitive rates and fees on new purchases and refinances. But depending on where you live, you might not have access to home equity solutions.

Flagstar is also transparent about its mortgage rates, allowing borrowers to request quotes when shopping around.

Plus, you’ll find a wealth of helpful information in the lender’s Mortgage Information Center to guide you through the loan process. This includes home buying tips, qualification tips, and tips on loan servicing. It also offers a variety of calculators to estimate everything from monthly payments and mortgage refinance costs to escrow withholdings and debt-to-income ratio.

The more information you have, the easier it’ll be to make an informed financial decision.

Just remember to compare rates and fees from a few other lenders before choosing the mortgage lender that’s best for you.

Comments are closed.