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Flagstar Bank Mortgage Lender Review for June 2022

Flagstar offers a wide variety of loans for every income level.

With a reputation as a mortgage lender that will close your home fast and on time, Flagstar Bank is a worthy contender for a home loan. In some cases, buyers can complete a home closing in as little as 15 days, according to the mortgage lender.

Flagstar Bank offers quite a bit of flexibility in its portfolio of loans and programs for prospective homebuyers. For example, Flagstar has a first-responder loan program to those who work on the front lines, such as police officers, firefighters and EMTs, offering a $500 lender credit at the close of escrow.

Flagstar

Like

  • Free to lock in interest rate up to 60 days
  • Can close as fast as 15 days in some cases
  • Eliminates or reduces fees for veterans for VA loans

Don't Like

  • Under fire from CFPB for improper mortgage practices in 2014
  • Minimal information about loans and rates on website

The bank also has a professional loan program to those in certain industries like law or medicine. With a 700 credit score or above, you can qualify for a loan up to $1.5 million, and no mortgage insurance is required. In addition, Flagstar offers Community Reinvestment Act loans that cater to underserved and lower-income communities with discounted rates and fees. 

Flagstar was under fire as recently as 2014 for improper mortgage practices, specifically for blocking borrowers' attempts to save their homes before foreclosures were enacted. The bank was ordered to pay $37.5 million in fines and compensation to victims by the Consumer Financial Protection Bureau.

Here's everything you need to know about Flagstar and its mortgage offerings.

What types of mortgages does Flagstar offer? 

Flagstar offers the full menu of home loans to its customers. Its list includes but is not limited to:

  • VA, or Veterans Affairs loans
  • FHA, or Federal Housing Administration loans
  • Conventional 
  • Jumbo
  • ARMs, or adjustable-rate mortgage loans
  • Refinance
  • Home equity loans (nationwide, except Texas)
  • HELOC, or home equity lines of credit loans
  • Refinance
  • Construction/renovation

Minimum credit score

The minimum credit score you need to take out a government loan, like an FHA or VA loan, with Flagstar is 580. For conventional mortgages the minimum required credit score is 620, and for jumbo loans that number jumps to 680.

Minimum down payment

The minimum down payment required varies by loan type with all lenders, but generally the down payment requirements for some of the most common types of loans with Flagstar are:

  • VA loan: 0% minimum down payment required
  • FHA loan: 3.5% minimum down payment required
  • Conventional loan: 3% minimum down payment required
  • USDA: 0% minimum down payment required

What are Flagstar's terms and fees?

There are standard costs and fees associated with buying a home no matter who your mortgage lender is. Flagstar typically charges a processing and underwriting fee (as do most lenders), but it eliminates or reduces all of its regular fees for VA loans, which is a serious perk for veterans.

There are also typical fees involved in closing on your home that you pay through your mortgage lender for third-party services involved in the closing process -- for example, fees for your home appraisal, title, flood insurance, escrow, wiring, county recording and other local services. Some of the most common ones are:

You can find out more about what's included in closing costs here.

Does Flagstar offer mortgage points?

Yes, you can buy mortgage points to lower your interest rate. One point equals 1% of the value of your mortgage. Known as "buying down your rate," buying points is essentially paying a fee to lower your interest rate, which also lowers your monthly payment, benefiting your budget. 

Where does Flagstar operate?

Flagstar operates online in all 50 states in the US, has 82 physical locations and nearly 300 loan officers.

Can you refinance with Flagstar?

Flagstar offers standard refinancing options. You can complete a cash-out refinance, standard-rate term refinance or convert your adjustable-rate mortgage into a fixed-rate mortgage. The bank has a refinance calculator you can use to figure out if a refi makes sense for your specific situation.

FAQs

Does Flagstar advertise interest rates online?

Flagstar does not advertise daily interest rates online, but its website offers basic explainers of its most popular type of loans. In order to get a customized rate, you'll need to provide your name and address and answer a series of questions, including how much you're looking to spend on a home and what your credit score is.

How many days does it take to close on a home with Flagstar?

On average, it takes around 21 to 30 days to close on a property with Flagstar, although it can take as little as 15 days. The location of your home can impact the amount of time it takes to close -- if you're buying your home in a highly sought-after area it could take longer.

Methodology

CNET reviews mortgage lenders by comparing a variety of criteria including loan types offered, credit score requirements, down payment requirements, features, terms and fees, discounts offered, accessibility and refinance options.

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