Are you looking for an FHA, construction, or renovation loan? If so, Flagstar Bank could be your ideal lender.
If you’re in the military, you can also access VA loans through Flagstar, whether you’re funding the purchase of a new home or refinancing your current one.
Below, we explore what all options Flagstar Bank has to offer you in regard to home loans.
Read on to find out if it has the best solution for your needs.
Flagstar Bank Overview
Founded in 1938 as a financial institution, Flagstar Bank was chartered in 1987 as a federal savings bank.
Headquartered in Troy, Michigan, today the bank is a leading mortgage loan provider, offering a wide range of financial services and products to its customers through its website, mobile app, and over 100 branches in Michigan and California.
Flagstar Bank is rated A- by the Better Business Bureau. It’s a top-10 lender in the country when it comes to home equity products, based on loan volume. It also makes our list of the best VA loan providers.
Flagstar offers fixed-rate home equity loans and adjustable-rate home equity lines of credit, giving you the opportunity to choose which one best suits your needs.
The bank offers credit lines from $10,000 to $1 million. Besides its numerous physical locations and online platforms, Flagstar also has an extensive network of over 1,700 brokers and lenders across the United States.
Now, let’s look a little closer at some of the home loans you can get from Flagstar Bank.
Flagstar Home Loan Options
From fixed-rate mortgages to renovation loans, you have a wide range of loan options to choose from to meet your personal goals. Let’s expound on the various types of home loans Flagstar Bank offers, so you can be able to make an informed choice:
Flagstar offers 15-year and 30-year fixed-rate mortgages. With a fixed-rate mortgage, your rate doesn’t change from the opening of the loan until it’s fully paid off.
It’s advisable to choose the 30-year fixed-rate mortgage. You’ll repay your loan over 30 years, translating to smaller monthly payments.
Moreover, Flagstar can work with you to tailor-make a mortgage option for you if both the 15-year and 30-year mortgage options aren’t suitable.
Adjustable-rate Mortgage (ARM)
With ARM, your rate will be changing after a given period. Flagstar offers 5/1 ARM, 7/1 ARM, and 10/1 ARM. The first figure denotes the number of years it takes before the initial rate is adjusted.
The second figure indicates how often your rate will change after the initial adjustment. That means your rate will be changing once a year.
If you want to make changes to your existing home loan, you’ll have to refinance it. Refinancing allows you to reduce your rate, reduce or increase the loan term, or switch from one loan type to another.
Flagstar also offers a cash-out refinance, which can help you cover home improvement costs or clear other loans.
Multiple Property Loans
If you already have 7-10 financed properties, you can benefit from Flagstar’s Multiple Property loans. The loan can either be fixed or adjustable.
The Federal Housing Administration (FHA) Loans
These loans are designed to help people with low income or bad credit purchase homes. You can get a 10 to 30-year FHA fixed rate loan from Flagstar. You’ll need to raise a down payment of at least 3.5%.
You also have the option of opening a 3-year or 5-year FHA Adjustable Rate mortgage with Flagstar.
As you may already know, these loans are backed by the Veterans Administration and provided through banks and lenders like Flagstar.
They allow veterans and active-duty personnel to buy or refinance a home.
Flagstar offers both 3-year and 5-year VA adjustable rate mortgages.
VA loans come with exceptionally low interest, zero dollar in downpayment, and no required PMI.
Construction Draw loans
If you want to build a new home from scratch instead of purchasing an existing one, you can benefit from a Flagstar Construction Draw loan.
You can finance a new main home up to $3 million and secondary homes up to $2.5 million.
Flagstar One-Close Loans
With this type of loan, you can construct and finance your new property all with only one application and one closing.
That means you’ll incur just a single set of closing costs, have a simple schedule, and make interest-only payments over the course of the construction period.
Flagstar Renovation Loans
With a Flagstar Renovation loan, you not only can cover home renovation costs, but you can also buy a home and renovate it.
When the loan closes, the funds are escrowed in an interest-earning account.
Any funds that remain once the renovations are complete can be used to pay down the principal of the renovation loan.
Flagstar Mortgage Application Process
To apply for a Flagstar mortgage online, go to Flagstar’s Home Loans page and click the “Apply Now” button.
You’ll need to provide some basic information, including:
- Contact details
- Type of loan
- Purchase or refinance
- Loan amount
- Desired down payment
Once you submit the details, you can choose to be called by a mortgage loan officer or to proceed and complete the entire application process online.
It is worth noting that even if you choose to complete the entire application online, a loan officer will still be assigned to you to guide you through the process.
Moreover, Flagstar Banks allows for online document uploading, electronic signature, and online loan process tracking.
Flagstar also provides a few mortgage calculators, which can help you evaluate and understand various home loan options.
With these calculators, you can easily determine the loan amount you qualify for, your down payment, how much you’ll pay monthly, and other aspects of your loan.
What We Like About Flagstar
- Federal Loans: Offers all federal government-backed loans, including FHA, VA, and USDA loans
- Equity: Offers home equity lines of credit and home equity loans
- Construction: Offer a selection of construction loans and takes pride in renovation loans expertise
What We Don’t Like About Flagstar
- Usability: The mobile app has limited functionality
- Fees: Charges a $1,000 origination fee, which is higher compared to other lenders in its class
Alternative to Flagstar
While most mortgage lenders offer similar options and features, each lender usually has something unique. So, if Flagstar doesn’t seem to meet your needs satisfactorily, you might want to look at what alternative VA lenders have to offer.
Take loanDepot, for instance. loanDepot is one of the leading non-bank lenders in the home loans market. It offers mortgages in all 50 states and has funded over $100 billion in mortgages since its inception in 2010.
You might also consider J.G. Wentworth for your next home loan. With a robust offering of VA loans, USDA loans, FHA loans, and refinancing options, J.G. Wentworth is an excellent choice. You can also choose between fixed and adjustable-rate mortgages.
It’s all about comparing quotes to decide what your best choice is.
Final Thoughts on Flagstar Bank
Flagstar Bank gives you access to a wide range of mortgage options besides its numerous bank account offerings.
You can open several different home loans, from a fixed-rate mortgage to a USDA-backed rural development loan.
If none of the traditional loans suit your needs, Flagstar can work with you to tailor-make a fixed-rate loan with a term that is convenient for you.
The bank can also help finance your home renovation or construction.