Flagstar Bank Mortgage Review 2023

What borrowers say about Flagstar mortgage

NerdWallet’s lender star ratings assess objective qualities, including rates, fees and loan offerings. To assess borrowers’ subjective experiences with lenders, NerdWallet has gathered customer satisfaction ratings from J.D. Power and Zillow.

• Flagstar Bank receives a 542 out of 1,000 in J.D. Power’s 2022 U.S. Mortgage Servicer Satisfaction Study. The industry average for servicing is 607. (A mortgage servicer handles loan payments.)

• Flagstar Bank receives a customer rating of 4.97 out of 5 on Zillow, as of the date of publication. The score reflects more than 2,950 customer reviews.

Flagstar mortgage variety of loan types

• 5 of 5 stars

Flagstar, acquired in late 2022 by New York Community Bancorp. in a deal not expected to affect consumers until 2024, offers government-backed FHA, VA and USDA loans. FHA loans are a popular option for first-time home buyers, require down payments as low as 3.5% and are forgiving for borrowers with limited credit histories or low credit scores. VA loans allow no down payment.

With community-based loan advisors in many parts of the country, Flagstar says its reps are familiar with low down payment state bond programs for first-time home buyers and income-limited households as well as the areas that qualify for rural development mortgages backed by the U.S. Department of Agriculture.

Flagstar extols its expertise in renovation and construction mortgages. The Fannie Mae HomeStyle loan, FHA 203(k) loan and Flagstar’s Destination Home loan are among its renovation mortgage options.

» MORE: Best construction mortgage lenders

Flagstar HELOC and home equity loans

The lender also offers home equity loans and home equity lines of credit, or HELOCs. These second mortgages are one way for homeowners to access home equity without refinancing or selling their home. Funds obtained with a second mortgage can be used for expenses such as home improvements, education costs or debt consolidation.

The bank’s home equity loans are available in states with Flagstar branches: California, Indiana, Michigan, Ohio and Wisconsin. Home equity loans provide a lump sum, and your interest rate will never change.

Flagstar’s home equity lines of credit are available nationwide. A HELOC offers as-you-need-it withdrawal convenience, and you pay interest only on the outstanding balance.

Flagstar mortgage ease of application

• 5 of 5 stars

If you live outside the north-central U.S., you may never have heard of Flagstar Bank. But the savings bank, based in Troy, Michigan, originates home loans in all 50 states and has retail locations in more than half while deploying a substantial network of more than 2,000 brokers across the nation.

Selecting the "Apply Now" button on Flagstar’s Home Loans page will take you to what is essentially a contact request page. Enter basic information: purchase/refinance, type of loan, amount, down payment and so on, along with your contact information, and a mortgage loan advisor will contact you.

You also have the option of entering more detailed information about yourself, the property, your employment and estimates of your assets and liabilities. If you opt for the online application, a loan advisor will be assigned to help you through the process.

Flagstar also offers online document uploads, electronic signature and online loan process tracking.

Flagstar mortgage rates and fees

• 2.5 of 5 stars

• Flagstar Bank earns 2 of 5 stars for average origination fee.

• Flagstar Bank earns 3 of 5 stars for average mortgage interest rates.

Borrowers should consider the balance between lender fees and mortgage rates. While it's not always the case, paying upfront fees can lower your mortgage interest rate. Some lenders will charge higher upfront fees to lower their advertised interest rate and make it more attractive. Some lenders just charge higher upfront fees.

» MORE: 'Should I buy points?' calculator

Flagstar mortgage rate transparency

• 5 of 5 stars

Information on mortgage rates is readily available on Flagstar's website by navigating to the mortgage section of the menu and selecting "Get a Mortgage Quote." From there, answer at least four questions about the home's value and ZIP code, and you're presented with several loan options, along with rates and APRs.

Alternatives to Flagstar mortgage

Here are some comparable lenders we review that borrowers can consider. 

Guild Mortgage offers a similarly generous variety of loan types, and Northpointe Bank offers options for first-time home buyers.

» MORE: Best mortgage lenders for first-time home buyers

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