Flagstar Bank provides a comprehensive range of mortgage options, including conventional, jumbo, construction, and government-backed loans. Additionally, the lender offers various discount programs, such as incentives for returning customers, employer-related discounts, and special offers for first responders, active military, and veterans.
Best for: New-Home Construction Mortgages
Flagstar Bank Review 2024
Overview:
| Criteria | Best for | Rate | Minimum Credit Score | Mortgage Rates | Minimum Down Payment |
|---|---|---|---|---|---|
| Flagstar Bank | New-Home Construction Mortgages | 5.0 | 620 | Lower than the national average | 0% to 3.5% |
Loan Types:
Flagstar Bank offers a diverse array of loan options, including conventional and jumbo mortgages in fixed- and adjustable-rate structures, FHA, VA, and USDA loans. The lender also provides construction and renovation loans, along with specialty loans for multiple properties and high-cost areas. Home equity loans are available in limited areas, and customers can check eligibility for such loans by entering their ZIP code on the Flagstar website.
| Loan Type | Yes | No |
|---|---|---|
| Conventional | ✓ | |
| FHA | ✓ | |
| VA | ✓ | |
| USDA | ✓ | |
| Jumbo | ✓ | |
| ARM | ✓ | |
| Home equity loan | Limited | |
| Specialty | ✓- Multiple Property Loans, High-Balance Loans and Jumbo Adjustable Rate |
Speed:
Flagstar Bank boasts an average closing time of 35 days, which is shorter than the industry average. In some cases, closing can be completed in as few as 11 days.
Eligibility:
- Minimum credit score of 620
- Minimum down payment of 0% for VA and USDA loans, 3% for conventional loans, and 3.5% for FHA loans
- Acceptance of alternative credit data, such as rent, cell phone, and utility payments
Current Conventional Mortgage rates :
These current mortgage rates are based on standardized parameters. For conventional mortgages, calculations are made assuming an owner-occupied, one-unit property with a loan amount of $350,000. For jumbo mortgages, the loan amount is $750,000. These calculations also assume an 80% loan-to-value ratio, a credit score of 740 or higher, and a 60-day lock period.
| Loan term | Interest Rate | APR |
| 30-Year Fixed | 7.56% | 7.46% |
| 15-Year Fixed | 6.73% | 6.68% |
| 30-Year Jumbo | 7.30% | 7.26% |
| 5/6 ARM | 7.01% | 7.04% |
| 7/6 ARM | 7.28% | 7.28% |
Pros and Cons
Pros:
- Availability: Flagstar Bank provides both online and branch locations for convenience, catering to customers who prefer different banking channels.
- Competitive Rates: The bank offers low mortgage rates, making home financing more affordable for borrowers.
- Inclusive Criteria: Flagstar Bank considers alternative data, such as utility and rent payments, which can benefit individuals with limited credit history or non-traditional credit profiles.
- Low Minimum Credit Score Mortgages: Flagstar Bank offers mortgages with low minimum credit score requirements, enabling a wider range of individuals to qualify for home loans.
Cons:
- Limited Branch Presence: While Flagstar Bank has branch locations, they are only available in a few states, potentially limiting access for customers outside those regions.
- Geographic Constraints: Branch locations are not available in every state, which could inconvenience customers residing in areas without local branches.
Why you choose Flagstar bank?
Flagstar Bank provides two distinct options for new-home construction mortgages: the construction draw loan and the one-close construction loan.
The construction draw loan allows new-home buyers to pay only the interest on the draw balance while their home is under construction. Upon completion of the home, the purchase is finalized using one of Flagstar’s mortgage options. This loan is applicable for constructing primary residences valued up to $3 million.
On the other hand, the one-close construction loan allows borrowers to pay interest solely during the construction phase, which helps in managing costs effectively. Furthermore, it secures the interest rate during the construction period and offers three financing options: conforming, jumbo fixed, and adjustable-rate mortgage (ARM) loans.
How To Apply:
Customers can apply for a mortgage through Flagstar Bank via online channels and multiple avenues for customers to obtain a mortgage. They have the option to apply online or meet with a lender face-to-face.
Additionally, individuals can visit a branch location situated in Indiana, Michigan, Ohio, and Wisconsin. Customer support services, available via email, phone, and online chat, are accessible from Monday to Friday, spanning from 7:30 a.m. to 9 p.m. ET, and Saturdays from 8:30 a.m. to 6 p.m. ET. Preapproval typically requires less than three days.
Customer support is available during specified hours throughout the week, and preapproval typically takes less than three days.
Methodology:
We conducted a comprehensive review of over 50 mortgage lenders operating nationwide, both online and in-person. Our review encompassed some of the largest mortgage lenders by volume, including banks, credit unions, and online lenders. Lenders that do not publicly disclose their interest rates online were excluded from consideration.
Advisor’s Criteria:
Advisor evaluates home loan lenders based on criteria that significantly influence the overall cost of the mortgage and the homebuying process. These criteria include borrower eligibility requirements, the diversity of loan options, and features that impact the homebuying journey.
Weighting of Categories:
The best mortgage lenders were assessed based on the following categories, each assigned a specific weighting:
- Interest Rate: 20%
- Down Payment Requirements: 20%
- Credit Score Minimum Requirements: 20%
- Consideration of Alternative Credit Data: 10%
- Preapproval Time: 10%
- Closing Timelines: 10%
- Variety of Loan Types: 10%
- Lender Discounts Offered: 5 bonus points
Focus on Affordability and Accessibility:
Our methodology prioritizes affordability, accessibility, and key features that directly impact the homebuying process, such as preapproval and closing times. By focusing on these aspects, we aim to provide consumers with valuable insights that align with their top priorities when comparing mortgage lenders.
