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Flagstar Bank home equity review

Get a loan or line of credit with no closing costs from this regional bank.

Flagstar Bank offers a pretty standard set of home equity products with discount options and no closing costs, as long as you keep the account open for three years. But you have to live in a state with a physical bank branch to apply for a home equity loan or home equity line of credit (HELOC).

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Details

Loan products offeredHome equity loan, HELOC
Minimum credit scoreHELOC: 720
APR range3.99% to 21.00%
Repayment termsHELOC: 10-year draw period, 20-year repayment period
Loans: 10, 15 and 20 years
Loan limits$10,000 to $500,000
State availabilityOnly available in: CA, IN, MI, OH, WI

Pros and cons of Flagstar Bank

Pros

  • No closing costs. This bank doesn’t charge closing costs or application fees.
  • Auto-pay discount. You can save 0.25% on your loan’s interest rate and 0.50% on your HELOC interest rate if you sign up for automatic payments from your Flagstar deposit account when you apply.

Cons

  • Limited availability. Mortgages are available nationwide, but home equity products are only available through Flagstar retail branches, which are only located in select states.
  • No online applications. If you want to apply for a home equity product, you have to do it through a loan officer either in person at a bank branch or over the phone.

What types of fees does Flagstar Bank charge?

Flagstar doesn’t charge application fees or closing costs as long as the credit line or loan account is open for at least three years. If you close your accounts before that, you’ll be required to pay back all closing costs and fees.

If you choose to pay points on your loan, you’ll be responsible for prepaid interest as well as any state or other government taxes and fees. And the bank charges a $75 annual fee on your HELOC after the first year.

Flagstar Bank requirements

No requirements are listed on Flagstar’s website, but bank decisions are typically made based on the following criteria:

  • Credit score
  • Loan-to-value ratio
  • Debt-to-income ratio
  • The size of your loan or line of credit
  • The amount of time you need to pay it back

Documentation

Flagstar doesn’t provide a list of required documents online, but typically you’ll need to have the following ready before you apply:

  • Recent pay stubs
  • Statements for bank, retirement and investment accounts
  • Tax returns and W-2 forms
  • Homeowners insurance information
  • Information about the market value of your house

How to apply for a home equity loan with Flagstar Bank

Flagstar doesn’t offer online applications. Either go to your local bank branch or fill out the online form with your contact information to get a call from a Flagstar loan officer.

What types of home equity products does Flagstar Bank offer?

Flagstar offers two options to let you access your home’s equity:

  • Home equity loans. This option offers a lump sum amount with a fixed interest rate and allows you to choose between 10-, 15- and 20-year repayment terms.
  • Home equity line of credit (HELOC). This variable-rate credit line allows you to draw money out as you need it for ten years, then repay the amount over twenty years.

Other mortgage products offered by Flagstar Bank

Choose from the following mortgage loans:

  • Conventional
  • FHA
  • VA
  • USDA
  • Jumbo
  • Mortgage refinance
  • Multiple property
  • High balance loans
  • Construction draw loan
  • One-close loan (construction-to-permanent)
  • Renovation loan

How Flagstar Bank’s home equity products compare to other lenders

This bank’s home equity offerings don’t stand out much from those found at other banks of this size. Even the terms are fairly standard. But you can get a discount on your interest rate if you sign up for automatic payments when you apply — saving you 0.25% on your loan and 0.50% on your HELOC.

Compare HELOC lenders

Compare these lenders and lender marketplaces by the type of home equity product you’re searching for, state availability and minimum credit score. Select See rates to provide the company with basic property and financial details for personalized rates.

Name Product Loan products offered State availability Min. credit score
SoFi
(NMLS #1121636)
SoFi
Conventional, Home equity, Refinance
Not available in: HI, MO, NM, NY, WV
620
No hidden fees, multiple loan terms, and member discounts available.
Figure
(NMLS #1717824)
Figure
HELOC
Not available in: DE, HI, KY, MD, NY, SC, TX, UT, WV
620
Speedy prequalification, minimal fees and a wide range of loans and terms with this HELOC lender.
LendingTree
(NMLS #1136)
LendingTree
HELOC, Home Equity loans
Available in all states
620
Connect with vetted lenders quickly through this free online marketplace.
Hometap Equity Partners
Hometap Equity Partners
Home equity investment
Only available in: AZ, CA, FL, MA, MD, MI, MN, NC, NJ, NY, OR, PA, VA, WA
600
Sell a portion of your home's equity for cash without monthly payments or hurting your credit score.
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Compare up to 4 providers

Flagstar Bank reviews and complaints

Flagstar Bank isn’t accredited with the Better Business Bureau (BBB), but as of August 2021 it has an A+ rating for answering 252 complaints in the last three years. The bank also has 183 customer reviews, averaging 1.02 out of 5 stars. The bank only has six reviews on Trustpilot, where it has a 2.6 star TrustScore.

Customers complain of loan servicing issues after their loans were transferred to Flagstar from other loan originators, while positive reviews appreciate the long customer service hours.

Our verdict

Flagstar offers most of its services and products nationwide, and if you have an account with the bank and sign up for autopay, you can get a decent discount on your interest rate. But its home equity products are only available through the bank’s physical branches. So if you live outside the five states where Flagstar has locations, you’ll need to shop around for another lender.

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