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Flagstar Mortgage Review 2018

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Flagstar Mortgage Overview

In addition to Flagstar Bank’s many bank account offerings, it also operates a vast mortgage division. You can open a number of different home loans from fixed-rate mortgages to VA Adjustable Rate loans to USDA-backed Rural Development loans. Flagstar will even work with you to create a fixed-rate mortgage with a term that works best for you. You can also obtain loans for home renovation, construction and rehabilitation. Flagstar can help you refinance your existing mortgage, too. 

Flagstar provides a handful of mortgage calculators to help you better figure out and understand your home loan options. These can help you calculate how much you can borrow, your monthly payment amounts, your down payment and more. 

Does Flagstar Mortgage Operate in My Area?

Flagstar bank operates 107 branches in Michigan and California, with its mortgage division operating in 88 locations. Flagstar also has a wholesale network of more than 1,700 brokers and lenders in each state. 

What Kind of Mortgage Can I Get With Flagstar? 

Fixed-rate mortgage: Right off the bat, Flagstar Bank offers two of the more common mortgage types: the 30-Year Fixed and 15-Year Fixed. A fixed-rate mortgage simply means that your rate remains the same from opening to when it's fully paid off. A 30-year fixed-rate mortgage allows you to pay off your loan over 30 years, making for smaller monthly payments. This option gives you some sort of financial stability since you’ll stick with the same payments for the life of the loan. 

15-year fixed-rate mortgages typically have lower rates than 30-year loans, however. This is because there’s less time for you to potentially default on the loan. Still, since you’re paying off the loan over a shorter period of time, the monthly payments will be higher. 

Flagstar can also work with you to create a custom mortgage option for you if neither of these traditional terms work for you. 

Adjustable-rate mortgage: An adjustable-rate mortgage, or ARM, allows you to benefit from an occasional rate change after a set period of time. Flagstar offers 5/1 Adjustable Rate, 7/1 Adjustable Rate and 10/1 Adjustable Rate loans. When looking at an ARM, the first number gives you the length of the stagnant rate period. So for example, Flagstar ARMs will keep the same opening rate for five, seven and 10 years, respectively. Then the second number indicates how often your rate will adjust after that term ends. Each of Flagstar’s ARMs will make rate changes once a year. 

Refinance: To make changes to your mortgage, whether fixed- or adjustable- rate, you’ll need to refinance the loan. This can get you a reduced rate, allow you to shorten or lengthen your term or switch from adjustable to fixed (and vice versa). Shortening your loan term allows you to pay off your loan faster and save money by avoiding years of accrued interest. On the other hand, lengthening your term gives you more time to pay it off resulting in smaller monthly payments. 

You can also get a cash-out refinance with Flagstar which can help you pay for home improvements or pay off other loans. 

Jumbo loan: If your home is priced above conventional amounts, you’ll need a jumbo loan. Flagstar’s Jumbo Fixed Rate and Jumbo Adjustable loans cover financing on homes from $453,101 to $3 million. A Flagstar Jumbo Adjustable loan requires a down payment of at least 10% while a Jumbo Fixed Rate loan will need at least 15% down. 

Multiple Property loans: A Flagstar Multiple Property loan works when you already have seven to 10 financed properties. You can open this loan as either adjustable or fixed.

FHA loans: FHA loans are backed by the Federal Housing Administration (FHA) as a way to help individuals buy a home even with low income, bad credit or no credit. You can open an FHA Fixed Rate loan from Flagstar with a term from 10 to 30 years. You’ll need a down payment of at least 3.5%. 

You can also open an FHA Adjustable Rate mortgage with Flagstar as either a three- or five-year initial fixed-rate period. 

FHA 203(k) loans: This home loan can help finance your acquisition and up to $5,000 in renovation of a property. The mortgage is based on the projected value of the property with the work completed. You’ll need to put down at least 3.5% and complete the property rehabilitation within six months of closing. 

FHA 203(h) loans: FHA 203(h) loans are designed to help homeowners recover from natural disasters. If your property was destroyed or damaged by a natural disaster and needs to be replaced, you can get an FHA 203(h) loan, either fixed or adjustable, within a year after the President’s declaration of the disaster to help you rebuild. 

VA loans: VA loans are backed by the Veterans Administration, enabling veterans and active-duty personnel to purchase or refinance a new home. VA loans don’t require any down payment and come with much lower rates. Flagstar VA Fixed Rate mortgages range in terms from 10 to 30 years. Flagstar VA Adjustable Rate mortgages have an initial fixed-rate period of either three or five years.  

State Housing Finance Agency Loan: Flagstar Bank participates in state Housing Finance Agency (HFA) loan programs. These loans, also known as state bonds, include single-family, 30-year, fully amortizing, fixed-rate mortgage loans offered in conjunction with conventional (Fannie Mae), FHA, VA, rural housing, and HFA guidelines. You can open a Flagstar HFA loan in Connecticut, Michigan and Wisconsin. 

USDA/ Rural Development loans: These loans are made for properties within rural areas as determined by the U.S. Department of Agriculture. USDA/ Rural Development loans are typically fixed-rate loans and don’t require a down payment. 

Construction Draw loans: If you’d like to build your dream home instead of finding an existing one, a Flagstar Construction Draw loan can help you do that. During the construction/draw period, when you’re drawing on your loan, you’ll only need to make interest payments on the drawn balance. You can finance a new primary residence up to $3 million and secondary residences up to $2.5 million. 

One-Close loans: A Flagstar One-Close loan allows you to construct and finance your new home all with just one application and one closing. You’ll only have to pay one set of closing costs, have a simplified schedule and be able to still make interest-only payments during construction. 

FHA Construction-to-Permanent loans: Again backed by the FHA, these loans allow for both the construction and financing of a new home. There is also one application and one closing with one set of closing fees. 

Renovation loans: A Flagstar Renovation loan can finance not only a home renovation, but exists to help you purchase (or refinance) a home and make renovations, too. At loan closing, renovation funds are escrowed in an interest-earning account. If any funds are left over after you’ve made all your renovations, those funds will help pay down the principal of the mortgage. 

What Can You Do Online With Flagstar Mortgage?

Flagstar Bank’s mortgage offerings are detailed online so you can easily learn about its many loan options. You can also take advantage of the many mortgage tools and calculators provided online. These can help you figure out how much you can actually borrow, what your mortgage payments may look like, whether you should refinance instead and more. 

Once you’re ready to get the mortgage process started, you can easily apply online by clicking the “Apply Now” button that corresponds to the loan you’re interested in. 

To manage your Flagstar loan(s) online, you’ll log into your MyLoans online portal. There, you can view your balance, interest rate, payments, taxes and more. 

Would You Qualify for a Mortgage From Flagstar?

To get your mortgage loan process started, you’ll need to get a prequalification letter from Flagstar. To get this letter, Flagstar will examine your credit worthiness, income, assets, debts and past credit use. Your credit management plays a big part in your qualification. All previous loans, credit cards, collections and inquiries will be checked. 

What’s the Process for Getting a Mortgage With Flagstar?

To start your Flagstar mortgage process, you can easily click on the “Apply Now” button for the loan you’d like to open. You can either submit the full loan application or submit some quick personal information to have a Flagstar mortgage expert contact you to continue your application together.

In your application, you’ll need to provide the purchase price of the home, how much you would like to borrow, your credit score, current address, your email address and phone number.

You can also get a prequalification letter from Flagstar by contacting a Flagstar Bank home loan qualification consultant over the phone or at your local bank branch.

How Flagstar Mortgage Stacks Up

Perhaps the biggest draw of Flagstar’s mortgage offerings is the number of loan options the bank provides. For starters, not only can you open a traditional 30- or 15-year fixed-rate mortgage, but if neither term works for you, you can work with a Flagstar loan officer to create your own term. There’s also a number of government-backed loans for you if you’re a veteran, a rural property owner or just don’t have the funds for a standard mortgage. 

Keep in mind that Flagstar operates its mortgage division in only 88 locations throughout Michigan and California. 

Tips for Managing Your Mortgage 

  • One of the first steps toward getting a mortgage should be to figure out how long you plan to stay in your new home. That will help you determine what kind of mortgage to get, whether fixed-rate, adjustable-rate, long- or short- term. For example, if you plan to stay in your home for years to come, a 30-year fixed-rate mortgage may make for the best mortgage for you. It gives you smaller payments each month and allows you to pay off the mortgage over a longer period of time. 
  • If handling a mortgage on top of all your other finances gets to be too much, you could enlist the help of a financial advisor. Our advisor matching tool can help you find the right advisor in your area to get started right away. After a short quiz about yourself and what you’re looking for in an advisor, SmartAsset will connect you with qualified advisors who can help you get your finances in order. 
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