Borrowers can consider several mortgage products from Flagstar Bank. For conventional purchases, VA, FHA and USDA loans, a credit score of 620 is required. The mortgage amount compared to the home’s real value determines a borrower's minimum down payment. If you're considering a loan from Flagstar, MoneyGeek's Flagstar mortgage review can help you make an informed decision.
MoneyGeek’s Take
Flagstar Bank Mortgage Review
Read our 2024 Flagstar Bank mortgage review to learn about the loans offered, including conventional, FHA, VA and jumbo loans at fixed and adjustable rates.
Updated: November 5, 2024
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At a Glance: Flagstar Bank Mortgages
- Flagstar Bank
- Varies based on the type of mortgageMinimum Down Payment
- Conventional, jumbo, FHA, VA, USDA, state housing finance agency loans, specialty loans, construction and renovation loans, home equity loans and refinanceLoan Products Offered
- Offices in Michigan, Indiana, California, Wisconsin and Ohio; originates loans in all 50 states.States of Operation
- Yes Online Application
Founded in 1987 as a federal savings bank, Flagstar Bank specializes in personal mortgages and mortgage refinancing. It is a division of Flagstar Bancorp and has a total asset value of $23.2 billion as the sixth-largest mortgage originator in the country. Flagstar Bank offers fixed and adjustable rate mortgages.
Its mortgage rates vary based on the loan amount, term, type of loan, the borrower’s credit score and other criteria. Required down payments for Flagstar Bank mortgages depend on the type of loan. However, the minimum down payment for a mortgage is decided by the proportion of the mortgage amount to the property's actual value.
The lender subjects all loan applications through a prequalification process to grant the borrower conditional approval. The loan will be approved after underwriting and home inspection upon successful verification of your information and paperwork. The lender also offers home equity loans to eligible borrowers.
The lender offers a range of unique mortgage products for borrowers at various income levels. Additionally, Flagstar offers loans to individuals without social security numbers. There are also home loan grant programs available for people with disabilities and senior citizens to assist in purchasing homes that are more accessible to them.
Pros
- Offers several mortgage products
- Online application
- Flexible qualification standards
- No prepayment penalties
- Fixed and adjustable mortgages
- Offers first-time homebuyer programs
Cons
- Loans with down payments below 20% need private mortgage insurance
Founded in 1987 as a federal savings bank, Flagstar Bank specializes in personal mortgages and mortgage refinancing. It is a division of Flagstar Bancorp and has a total asset value of $23.2 billion as the sixth-largest mortgage originator in the country. Flagstar Bank offers fixed and adjustable rate mortgages.
Its mortgage rates vary based on the loan amount, term, type of loan, the borrower’s credit score and other criteria. Required down payments for Flagstar Bank mortgages depend on the type of loan. However, the minimum down payment for a mortgage is decided by the proportion of the mortgage amount to the property's actual value.
The lender subjects all loan applications through a prequalification process to grant the borrower conditional approval. The loan will be approved after underwriting and home inspection upon successful verification of your information and paperwork. The lender also offers home equity loans to eligible borrowers.
The lender offers a range of unique mortgage products for borrowers at various income levels. Additionally, Flagstar offers loans to individuals without social security numbers. There are also home loan grant programs available for people with disabilities and senior citizens to assist in purchasing homes that are more accessible to them.
Flagstar Bank Mortgage Loan Types, Details and Requirements
MoneyGeek's Flagstar Mortgage loan review can help you understand the company's mortgage products, eligibility requirements, application process and rates.
Mortgage Types Offered
Flagstar Bank offers the following loan products:
- Conventional loans
- Jumbo loans
- FHA loans
- VA loans
- USDA loans
- State housing finance agency loans
- Specialty loans
- Construction and renovation loans
Flagstar also offers refinancing solutions, including cash-out refinancing and home equity loans. Its Community Lending and Home Loan Programs offer loans to people with low-to-moderate income at low down payments and flexible standards.
Mortgage Rates
Flagstar Bank's loans are available with either fixed or variable interest rates. The rates, however, vary by loan type, location, loan term, credit score and other factors. Flagstar does not guarantee the mortgage interest rates, which are tied to market changes.
When applying for a mortgage, you must decide between a fixed and adjustable interest rate. You can call (866) 488-0399 and speak to one of their loan specialists to learn more about interest rates.
Additional Fees
MoneyGeek's research indicates that Flagstar Bank applies the following costs, which may include a lender fee or an origination fee. Their website offers additional information on the matter.
- Closing Costs: Closing costs are generally 2% to 5% of the home's purchase price and may include the following charges:
- Appraisal
- Title insurance
- Closing transaction fee
- Loan origination fee
- Discount points
- Recording fee
- Underwriting fee
- Processing fee
- Prepaids: Prepayment of homeownership expenditures is another significant aspect of closing a mortgage loan. Homeowners insurance premium, association dues (if applicable), property taxes and pro-rated interest are included.
Minimum Borrowing Requirements
For the majority of mortgage products, Flagstar Bank requires a credit score of at least 620. Credit requirements for jumbo loans are typically significantly higher. However, individuals without social security numbers may only need a credit score of 580 to apply. For its Community Comeback Program, designed for homes in Pontiac, Michigan, the minimum credit score requirement is set to 660. However, the lender may have different credit requirements for each mortgage product it offers. You should contact them for further details.
Your home loan criteria may vary based on your chosen type of mortgage. The lender does not indicate its required down payment for each type of mortgage — minimum down payments are determined by the mortgage amount and the home's actual worth.
Flagstar Bank will prequalify your application for conditional approval. This is a creditworthiness assessment based on your income, debts, assets and credit history. To qualify for a mortgage, you must have a good credit score and a debt-to-income ratio that passes the lender's standards.
Flagstar Bank Mortgage Application Requirements
For a seamless and hassle-free application processing, Flagstar Bank mortgage loan applicants should provide the following documents:
- 1
Personal particulars of the borrower, like name, date of birth, contact information and social security number
- 2
Details of the property
- 3
W-2s for all employment in the last two years
- 4
1099 forms (for the self-employed)
- 5
Pay stubs for the last three months
- 6
Bank statements for the last two months
- 7
The last two years of tax returns
- 8
Statements for other sources of income, such as dividends, stock earnings, bonuses, pensions
- 9
Social Security or disability income
- 10
Securities documents, such as stocks, bonds, and life insurance policies
- 11
Proof of homeowners insurance
Is Flagstar Bank Right for You?
Purchasing a house is a significant financial commitment. With many available lenders, you must consider your alternatives carefully before selecting a mortgage provider. Our analysis considers the various prospective homeowners who may or may not be a good fit for the mortgage Flagstar Bank offers.
Who Flagstar Bank Is Perfect for
Flagstar Bank has mortgage options for many different types of borrowers. For example, individuals with 7-10 financed properties can pursue Flagstar Bank’s multiple property loan for assistance.
Borrowers with no social security number can consider conventional loans, which are available at fixed rates. They only need a credit score of 580 for eligibility. Prospective borrowers with low-to-moderate income should consider Flagstar's Community Lending and Home Loan Programs, which feature better rates and reduced monthly payments. They may also receive down payment assistance or a $500 lender credit for home appraisal.
Flagstar Bank also offers loans for construction and renovation. Individuals seeking loans who plan to build or improve their homes can seek this funding to help realize their vision.
Who Should Not Choose Flagstar Bank
Even though Flagstar Bank maintains physical offices, most of the application procedure occurs online. The lender is not suitable for homebuyers who may first prefer physical sites. Prospective borrowers with credit scores below 600 also do not qualify for the lender's mortgages.
How to Apply for a Flagstar Bank Mortgage Loan
Each mortgage lender has its own unique application process. This section details how to apply for a mortgage loan from Flagstar Bank.
- 1
Prequalify
Flagstar Bank's prequalification determines your ability to repay the loan. This process evaluates your income, assets, debts and previous credit use. You must provide identification information, including your Social Security number, employment verification documents (a month's worth of pay stubs, W-2s, or 1099 forms from the last two years) and bank statements from the previous two months.
- 2
Choosing a Mortgage and Down Payment
Once you are prequalified, a Flagstar loan officer will work with you to decide your ideal type of mortgage, interest rate and down payment. The amount you need to borrow in relation to the real value of the home determines the typical minimum down payment for a mortgage.
- 3
Submitting the Mortgage Application
It is possible to begin the application procedure online, over the phone, via mail and even in person. You must provide the lender with verification of your tax returns, investment accounts, social security or disability income and homeowners insurance. Borrowers may be asked to give additional information depending on their situation. You will also be asked to lock in the mortgage rates.
- 4
Home Inspection
You may be asked to conduct a home inspection by a professional to ensure your new home is problem free. It details the home’s structural condition and the condition of the major systems like electrical and plumbing.
- 5
Conditional Approval
Following the home inspection, your home’s underwriting may begin. In some cases, it will occur after you find the property. Before receiving final approval, the lender issues a conditional approval outlining certain conditions the borrower must satisfy.
- 6
Final Approval
At this point in the mortgage approval process, Flagstar sends your loan file to underwriters to obtain approval to close. After an underwriter evaluates and accepts all paperwork and information, you can close the mortgage. You may also need title insurance and homeowners insurance in order to get approved.
- 7
Loan Closing
The lender's loan officer will coordinate a closing date and time that works for you. The closing is at the title firm, attorney's office or escrow office. The total amount of closing costs you need to pay will be disclosed at least three days before the given date in a Closing Disclosure. You must bring a valid identification card and make the necessary payments before closing. After signing all the relevant paperwork, your loan will be closed.
- 8
Make Payments
The final phase is making payments. You can log in to your Flagstar mortgage account to make a payment online. You have the option of making manual monthly payments or setting up automatic payments through your checking account.
What to Do if You Are Rejected by Flagstar Bank
Flagstar can reject your mortgage application at any time, even if you have been prequalified or conditionally approved. Understanding what went wrong, as discouraging as it may be, can help you prepare for your next mortgage application. If your application was declined due to insufficient documents, a loan counselor from Flagstar may reach out to you.
In addition, Flagstar may make this decision for other reasons. Your credit history may be unsatisfactory or your debt-to-income ratio is above the acceptable limit. It's recommended to get in touch with the lender and request the reason for denial.
You can also look for a lender with less strict terms than Flagstar. However, if you do not know why you were rejected the first time, your second application may also be denied. Find out why you were first rejected and take the necessary actions to increase your chances of acceptance in the future.
Frequently Asked Questions About Mortgages From Flagstar Bank
In the following section, MoneyGeek offers information that can help you make an informed choice about a mortgage loan from Flagstar Bank. The most commonly asked questions about Flagstar Bank's mortgage products are provided below.
What types of properties are eligible for Flagstar Bank mortgage loans?
There is no specific eligibility requirement for the type of homes you can buy with Flagstar Bank mortgage.
Who can apply for a Flagstar Bank mortgage?
A minimum credit score of 620 is required to apply for a mortgage with Flagstar Bank. However, your income, debts and assets will affect whether or not the lender approves your mortgage. An applicant without a social security number can apply if they have a minimum credit score of 580.
What types of mortgage loans does Flagstar Bank offer?
Flagstar Bank offers the following:
- Conventional loans
- Jumbo loans
- FHA loans
- VA loans
- USDA loans
- State Housing Finance Agency loans
- Specialty loans
- Construction and renovation loans
- Mortgage refinance
- Home equity loans
Is there a borrowing limit for Flagstar Bank mortgages?
The lender has not specified the borrowing limit for all of its mortgage types. Conventional purchase loans have a borrowing limit of $510,400, while jumbo loans have a borrowing limit of $3 million. Its high-balance specialty mortgage has a lending maximum of $548,251.
What is the minimum down payment Flagstar Bank will accept?
The down payment for Flagstar Bank mortgage varies by your chosen type of loan. However, the minimum mortgage down payment is determined by the ratio of the mortgage amount to the property's actual worth.
Does Flagstar Bank require private mortgage insurance (PMI)?
If your loan-to-value is greater than 80%, you may be required to purchase mortgage insurance in the event of failing to make a sufficient down payment.
Does Flagstar Bank require a property appraisal?
Flagstar does not clarify which of their mortgage types require a home appraisal. However, most mortgage types necessitate a home examination by an expert. You need to contact your loan officer to determine if the mortgage you chose requires a home appraisal.
About Christopher Boston
Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.
Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.
sources
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- Flagstar Bank. "About Flagstar." Accessed November 5, 2024.
- Flagstar Bank. "Commercial Real Estate Mortgage." Accessed November 5, 2024.
- Flagstar Bank. "Mortgage Qualification Process." Accessed November 5, 2024.
- Flagstar Bank. "Mortgage Process." Accessed November 5, 2024.
- Flagstar Bank. "Loan and Mortgage FAQs." Accessed November 5, 2024.
- Flagstar Bank. "Community Lending and Home Loan Programs." Accessed November 5, 2024.
- Flagstar Bank. "VA 30-Year Fixed Mortgage." Accessed November 5, 2024.
- Flagstar Bank. "Personal Government Home Loans." Accessed November 5, 2024.
- Flagstar Bank. "Specialty Loans & Mortgage Services." Accessed November 5, 2024.