Flagstar Mortgage review
This lender stands out for its construction loans, but closing costs can be hefty.
finder.com’s rating: 3.7 / 5.0
Thanks to its flexibility, Flagstar is one of the highest-volume lenders in the US. Weigh its pros and cons to find out if it’s the right fit for your purchase or renovation.
|Loan products offered||Conventional, Jumbo, FHA, VA, USDA, Home Equity/HELOC, Refinance|
|Minimum credit score||620|
|Minimum down payment (Conventional)||3%|
|State availability||Available in all states|
Requirements to qualify vary based on the type of loan you’re applying for. Generally, you’ll need:
- Minimum credit score of 580 for FHA loans, 620 for conventional and VA loans and 640 for USDA loans.
- Maximum debt-to-income ratio of 43%.
- Loan-to-value ratio of 80%.
Flagstar may request:
- Recent pay stubs.
- Statements for bank, retirement and investment accounts.
- Tax returns and W-2 forms.
- Homeowner’s insurance information.
- List of credit cards, plus car, student or home loans.
Costs and fees
Flagstar doesn’t disclose all its mortgage fees online, so talk with your loan officer about fees before signing any paperwork. Common mortgage fees include:
- Appraisal fee.
- Title insurance fee.
- Origination fee.
- Recording fee.
- Underwriting fee.
- Processing fee.
How to apply for a mortgage with Flagstar
Fill out the online form to kickstart the process. Once you’ve done that, you have the option of completing the application digitally or waiting for a callback from a loan officer.
- Go to the Flagstar website. On the homepage, hover over Loans and select Mortgage > Types of Mortgages.
- Select Apply Now.
- Enter your information about the loan you’re looking for and the property you want to buy, as well as personal information like what you have as a down payment and your contact information and credit score. Choose Submit.
- Wait for a message indicating your application has been received. If you want to keep going, choose Continue to Full Application.
- Work your way through the form, answering questions about your property, employment history, assets and liabilities.
- Make any necessary declarations.
- Upload supporting documents and Submit Your Application.
What types of mortgages can I get through Flagstar?
Other mortgage products offered by Flagstar
Flagstar offers the following specialty mortgage loans:
- Multiple property. Flagstar offers both fixed and adjustable rate mortgages for borrowers who already have between seven and 10 financed properties.
- High balance loans. If the home you want to finance is in a high-cost area, this loan is available in amounts that exceed the $510,400 loan limit for most conforming loans.
- Construction draw loan. With this loan, you can draw construction funds while only making interest payments, then refinance with one of Flagstar’s mortgage products when construction is complete.
- One-close loan. Sometimes called construction-to-permanent loan, this allows you to finance the construction of your new home and your mortgage all at once with one set of closing costs.
- Renovation loan. This loan allows you to finance your mortgage and any renovations your house needs all in one loan. Renovation funds are put in an escrow account, which is used to pay down the principal of your mortgage when the job is complete.
- Home equity line of credit (HELOC). Use your home’s equity to open a revolving credit line, so you only take out the money you need when you need it.
- Home equity loan. If you need a lump sum of money, you can take out a loan against the equity of your home.
How Flagstar’s mortgage products compare to other lenders
Flagstar offers all the traditional conventional and government-backed mortgages you’d expect to find at a bank its size, including home equity and jumbo mortgage products. But this lender hasmany offers for borrowers looking to build or renovate their home with three construction loan options:
- To purchase a fixer-upper
- To finance the construction and mortgage up front
- For borrowers who are ready to build but aren’t sure how they want to finance the home once construction is complete
Compare mortgage lenders and brokersCompare these lenders and lender marketplaces by the type of home loan you're searching for, state availability and minimum credit score (for a conventional loan). Select See rates to provide the company with basic property and financial details for personalized rates.
Flagstar reviews and complaints
Flagstar Bank isn’t accredited with the Better Business Bureau. But as of March, 2021, the lender holds an A+ rating for answering 238 complaints in the last three years, most of which were linked to loan servicing and problems with the payment process. Flagstar has earned a 1-star customer rating based on 136 reviews — but it’s worth noting that these are based on the bank as a whole and not only its mortgage department.
Across other online forums, customers praise the personalized service from loan officers, and many name the officer who made their complicated process easier. Customers also appreciate the construction and agricultural loans and the ability to lock in rates.
Pros and cons of Flagstar
- Mortgage quote tool. Flagstar offers a rate-quote tool that displays its current rates on the website based on the criteria you enter, including your credit score range and zip code.
- Create your own term. If you’re not sold on the traditional 15- or 30-year terms, work with a Flagstar loan officer to create your own term.
- Considers alternative credit data. The lender accepts rent and utility payments as credit data for FHA borrowers.
- Building loan products. Flagstar is known for offering three types of construction loans, plus a renovation loan.
- Low app ratings. The mobile app has a two-star rating for both iPhone and Android, and customers complain about issues with app updates and functionality.
- Limited availability for home equity products. While mortgages are available in all 50 states, home equity products are only available through their retail bank branches, which are located in California, Indiana, Michigan, Ohio and Wisconsin.
What is Flagstar?
Flagstar Bank was first opened in 1987 and has since become the sixth largest mortgage originator in the country. It also offers personal loans, business loans and banking and investment accounts, making it a one-stop financial shop for customers.
Katia Iervasi is a staff writer who hails from Australia and now calls New York home. Her writing and analysis has been featured on sites like Forbes, Best Company and Financial Advisor around the world. Armed with a BA in Communication and a journalistic eye for detail, she navigates insurance and finance topics for Finder, so you can splash your cash smartly (and be a pro when the subject pops up at dinner parties).
Flagstar may be a great option for anyone looking for a construction or renovation loan and for those who want more flexibility in their loan terms. But some customers have trouble with the mobile app, and you have to live in a state with a brick-and-mortar branch to take advantage of this bank’s home equity products.