Flagstar Bank Mortgage Lender Review for July 2022

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

Flagstar Bank offers some flexibility in its portfolio of loans and programs for potential buyers. For example, Flagstar has a first responder loan program for those who work on the front lines, such as police officers, firefighters and EMTs, offering a $500 lender credit upon completion of escrow.

As

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

Do not like

  • Under fire from the CFPB for abusive mortgage practices in 2014
  • Minimal loan and rate information on website

The bank also offers a professional loan program to those in certain sectors such as law or medicine. With a credit score of 700 or higher, you may qualify for a loan of up to $1.5 million and no mortgage insurance is required. Additionally, Flagstar offers Community Reinvestment Act loans that target underserved and low-income communities with reduced rates and fees.

Flagstar was under fire as recently as 2014 for improper mortgage practices, particularly 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 offers.

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
  • Giant
  • ARM or adjustable rate mortgages
  • Refinance
  • Home equity loans (nationwide, except Texas)
  • HELOC, or home equity lines of credit
  • Refinance
  • Construction/renovation

Minimum credit score

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

Minimum deposit

Minimum advance payment required varies by loan type with all lenders, but generally the down payment requirements for some of the more common loan types with Flagstar are:

  • VA loan: 0% minimum deposit required
  • FHA Loan: Minimum 3.5% deposit required
  • Classic loan: Minimum 3% deposit required
  • USDA: 0% minimum deposit required

What are Flagstar’s terms and fees?

There are standard costs and fees associated with buying a home, regardless of who your mortgage lender is. Flagstar typically charges processing and underwriting fees (as most lenders do), but it eliminates or reduces all of its regular fees for VA loans, which is a serious plus for veterans.

There are also typical fees associated with closing 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 registration and other local services. Some of the most common are:

You can learn more about what is 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 basically paying a fee to lower your interest rate, which also lowers your monthly payment, which benefits your budget.

Where does Flagstar operate?

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

Can you refinance with Flagstar?

Flagstar offers standard refinance options. You can fill out a cash refinancenormal rate term refinance or convert your adjustable rate mortgage into a fixed rate mortgage. The bank has a refinance calculator that you can use to determine if a refinance is right for your specific situation.

FAQs

Does Flagstar advertise interest rates online?

Flagstar does not advertise daily interest rates online, but its website offers basic explanations of its most popular type of loan. In order to get a personalized quote, you’ll need to provide your name and address and answer a series of questions, including how much you plan to spend on a home and what your credit rating is.

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

On average, it takes around 21-30 days to close a property with Flagstar, although it can take as little as 15 days. The location of your home can impact how long it takes to close – if you’re buying your home in a highly desirable area, it could take longer.

Methodology

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

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