Flagstar Bank
- Home equity loan, HELOC, interest-only HELOC
- Home equity loan: From 8.04%; HELOC: From 9.49%
- N/A
- Call 844-294-9055 to speak with a loan advisor or 800-968-7700 for 24-hour automated loan support
Flagstar Bank has been around since 1987, and the company has grown into one of the largest mortgage origination companies in the country. Flagstar offers home equity lines of credit (HELOCS) in 49 states (not available in Texas) and home equity loans in the eight states where it has branches -- Arizona, Florida, Indiana, Michigan, New Jersey, New York, Ohio and Wisconsin.
As more homeowners look to tap into their home equity, Flagstar Bank made our list of the best HELOC lenders because of its nationwide availability, price transparency and customer service.
Flagstar Bank: At a glance
| Types of home equity loans | Home equity loan, HELOC, interest-only HELOC |
|---|---|
| APR range | Home equity loan: From 8.04% HELOC: From 9.49% |
| Loan amounts | $10,000 to $1 million |
| Credit score requirements | N/A |
| Repayment terms | Home equity loan: 10, 15 or 20 years HELOC: 10-year draw period, 20-year repayment period |
| Average time for approval | N/A |
Flagstar Bank’s home equity loan products are best if you already do your banking at the institution due to the bank’s autopay discount offer. This isn’t a good option if you live in Texas, as the bank’s home equity products are not available there.
No home equity lender is perfect. If you’re thinking about using Flagstar Bank to access a portion of your home equity, consider these pros and cons before applying.
Pros and cons
Pros
Extra savings opportunities: Offers a 0.25% rate discount for setting up automatic payments from a Flagstar account.
Wide range of loan amounts: You can borrow anywhere from $10,000 to $1 million with a Flagstar home equity loan or HELOC.
No closing costs: There are no bank-imposed closing costs on home equity loans or HELOCs (unless you close your HELOC within 36 months of opening it).
Cons
Limited availability for home equity loans: Home equity loans are only available in the states where Flagstar has bank branches: Arizona, Florida, Indiana, Michigan, New Jersey, New York, Ohio and Wisconsin.
Scarce details: Limited information is available online about borrower requirements, including minimum credit scores.
No online application for HELOCs: To apply for a HELOC with Flagstar, you’ll need to visit a branch in person.
Home equity loan product options
Home equity loan: If you apply for a home equity loan at Flagstar Bank, you’ll get one lump sum of money, and you’ll have three options for repaying it: 10-, 15- and 20-year terms. You can borrow between $10,000 and $1 million, provided that you maintain a combined loan-to-value ratio of 80% or lower.
HELOC: Flagstar’s HELOC gives you the flexibility to borrow as much as you need when you need it at a variable interest rate. Loan amounts are flexible, ranging from $10,000 to $1 million. You’ll have a standard 10-year draw period and a 20-year repayment period.
Interest-only HELOC: Flagstar also gives homeowners the option to make interest-only payments on their HELOC. With an interest-only HELOC, you pay interest only on the amount you borrow during the draw period. Once you hit your repayment period, you’ll start making full payments on both the principal and interest.
Fees
There are no closing costs as long as you keep your account open for at least 36 months. For HELOCs, Flagstar Bank charges an annual fee of $75, although it’s waived in the first year. If you borrow more than $500,000, you will need to pay for the lender’s title insurance.
How to qualify
While Flagstar Bank doesn’t disclose specific credit score requirements for its home equity loan products, there are some key considerations the bank makes when reviewing applications. If you’re applying for a HELOC, the property must either be a one- to four-unit owner-occupied building or a one-unit second home, and your combined loan-to-value ratio cannot exceed 85% with the new line of credit added to your existing mortgage.
If you’re applying for a home equity loan, it will need to be on your primary residence (second homes are not allowed), and the combined loan-to-value ratio can’t exceed 80% with your existing mortgage.
Applying for a home equity loan or HELOC with Flagstar
To figure out if you’re eligible for one of Flagstar Bank’s home equity loan options, it’s best to allow the company’s website to use your location. Based on your ZIP code, the bank will tell you whether you can apply for a HELOC and a home equity loan. HELOCs are widely available, but home equity loans are more limited.
You can start your application for a home equity loan online. You’ll need to share a range of information about your primary mortgage -- the original amount, the remaining balance, your rate and monthly payment -- along with your driver’s license and details about your personal finances. If you don’t want to get started online, you can call 844-294-9055 to speak with a loan adviser.
For HELOCs, you’ll need to submit an information form online and wait to be contacted by a representative. You can also call 855-878-7768 to start the process.
Customer service
While Flagstar Bank offers a convenient online application, there are a variety of ways to get in touch with a real person. You can call 844-294-9055 to connect with a loan adviser over the phone. Representatives are available Monday through Friday between 7:30 a.m. and 8 p.m. ET, and Saturday between 7:30 a.m. and 4 p.m. ET. If you do decide to take out a loan with the bank and need assistance with your payments, the company has a 24-hour loan servicing number: 800-968-7700.
