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Flagstar Mortgage Review: Tons of Loan Programs to Choose From


One of the larger, but perhaps lesser-known mortgage lenders out there is Flagstar Bank, which was just acquired by New York Community Bancorp in late April 2021.

The savings bank, which has been around since the late 1980s, is based out of Troy, Michigan and publicly traded on the NYSE. They’ve also got billions in assets so they probably aren’t going anywhere anytime soon.

Flagstar survived the Great Recession in the early 2000s, albeit with some bruises and scratches thanks in part to their strong mortgage presence.

Despite a series of settlements related to their mortgage business, they remain also a top home loan originator, with the company self-proclaiming itself to be a “top 5 bank mortgage originator.”

Notice they said bank because many of today’s largest mortgage lenders aren’t banks, and are in fact non-banks, meaning they don’t take in deposits like Flagstar does.

Not only is Flagstar a bank, but they have aspirations to become an even bigger one.

The company recently acquired 52 banking branches from Wells Fargo in a bid to double its customer base, and it just happened to purchase them from the nation’s largest mortgage lender.

And their logo is being featured on the front of the Detroit Pistons jerseys, representing the franchise’s first-ever sponsor.

So it sounds like Flagstar is on a mission to grow even larger in the home loan space and become more of a household name nationwide.

Let’s learn more about them to see if they should be included the next time you shop for a mortgage.

Flagstar Mortgage Online Experience

  • They recently launched an online experience
  • Though it seems to require a phone call to finalize the loan submission
  • So their technology might still leave a lot to be desired
  • But some borrowers may prefer a human touch

While Flagstar has lots of brick-and-mortar branches nationwide, they recently created an “online experience” to keep up with the many other banks and virtual banks offering mortgages today.

This means you can apply for a home loan via their website via a simple 3-step process.

First, you shop for your mortgage rate, then if you’re happy with what you see, you select your rate.

Once you fill out the online application, you’ll be connected with a mortgage loan officer who will discuss and finalize your application. You get to choose the date and time of this conversation online, though it’s unclear if it’s in-person or over the phone.

Either way, you get the benefit of human touch, something a lot of lenders seem to be foregoing these days, for better or worse.

Flagstar Mortgage Rates

  • You can obtain real-time mortgage rates on their website
  • By answering a few basic questions
  • But they don’t seem to share all their loan options online
  • And their rates appear to be average compared to the competition

With regard to mortgage interest rates, one refreshing aspect is the ability to see real-time rates right on Flagstar’s website, without having to jump through a lot of hoops.

You only have to answer a few basic questions, such as property type, loan balance and property value, and estimated credit score to get your hands on their rates.

I did a dummy search and it spit out both a 30-year fixed and a 15-year fixed option, which while the most popular loan types, felt a bit limited.

Their fixed mortgage rates seemed to be pretty average compared to other major mortgage lenders, meaning not necessarily cheap but not overpriced either. Kind of middle of the road.

Of course, you have to pay close attention to lender fees, which they do list next to each rate.

Unfortunately, they don’t give you the option to see other types of loans, such as adjustable-rate mortgages, which I know they offer in 3/1, 5/1, 7/1, and 10/1 varieties.

It’d be nice to see more options online, though I’m sure you can discuss these with a Flagstar loan officer.

Flagstar Mortgage Options

  • This is where Flagstar shines
  • They’ve got countless home loan options to choose from
  • Including conventional, government, conforming, and jumbo
  • Along with construction loans, second mortgages, and more in many varieties

Like other big mortgage lenders, they offer a lot of different options, including both conforming and jumbo loans, along with several less conventional offerings.

They actually have a massive list of mortgage products that’s pretty impressive, which you can see on their website.

Aside from agency stuff from Fannie and Freddie, they also offer FHA loans, VA loans, USDA loans, second mortgages, construction loans, and more.

They offer the FHA 203k loan, along with the VA IRRRL, down payment assistance, and even a one-close construction loan

In the fixed-rate department, you can get terms of 8, 10, 12, 15, 20, 22, 25, 27, and 30 years.

For conforming loans they’ll go as high as 97% LTV (105% CLTV with a Community Second), and up to 90% LTV for jumbo loans.

They’ve got a multiple property loan that is designed for the borrower with 7 to 10 financed properties. It’s a first-lien home loan available in both fixed and adjustable options for second homes or investment properties.

With regard to jumbo loans, they offer both high balance loans, those backed by Fannie Mae and Freddie Mac in high cost areas of the country, along with full-blown jumbos up to $3 million loan amounts.

They also offer both fixed-rate and adjustable-rate second mortgages, including home equity loans and HELOCs, with promotional rates on the latter typically offered for the first six months. Just watch out for the annual fee!

The only product that seems to be missing is an interest-only mortgage, though they do offer the option on some of their construction loans (and HELOCs).

If you’re a mortgage professional, Flagstar has both a wholesale division that allows mortgage brokers to sell their loan products, and a correspondent division that lets mortgage bankers close loans with their own funds using a warehouse line also extended by Flagstar.

Lastly, Flagstar is a big home loan servicer as well and provides a ton of loan management tools for its customers via its MyLoans website.

In other words, they’re a full-service mortgage lender and loan servicer, with plans to grow even larger over time.

Flagstar Bank Professional Loan

  • They have their own doctor mortgage (and other professions)
  • That allows borrowers to purchase a home with zero money down
  • So long as they’ve got a good job or will have a good job in the near future
  • It targets high earners who aren’t yet asset rich

One highlight in their long list of loan programs is their so-called “Professional Loan,” which as the name suggests, is reserved for only certain types of borrowers.

Namely doctors, dentists, veterinarians, CPAs, attorneys, and architects.

I’ve written about doctor mortgages before and they can be a great low or no down mortgage payment option for the HENRYs (High earners not yet rich) out there.

Some professionals may want to purchase a million dollar home straight out of medical school despite having lots of student loan debt and limited assets.

But because their occupation basically assures them of making lots and lots of money in short order, lenders like Flagstar are willing to offer attractive terms that other borrowers don’t have access to.

This particular program comes in a 5/1 or 7/1 ARM with a max LTV of 100% (zero down) and loan amounts as high as $1.5 million.

Additionally, student loan payments that are deferred for more than 12 months can be excluded from DTI ratios.

Final Thoughts on Flagstar Mortgage

  • While their technology could be improved (no digital mortgage to speak of)
  • They’re a seemingly large and financially stable bank
  • With lots of physical branches and loan officers ready to assist borrowers
  • They’ve also got pretty much every loan program in the book to serve just about anyone in any situation

While they seem to be lacking in the technology department, without cool features like those seen with Quicken’s Rocket Mortgage and other fintech outfits, their human touch might set them apart.

There are still plenty of individuals who prefer speaking to a human one-on-one, especially when it comes to complicated mortgage jargon and major financial decisions.

They certainly have a lot of loan programs to choose from, so they should satisfy just about everyone on that front, assuming they make their customers aware of those other offerings.

The question mark is whether their interest rates are low enough to sway more borrowers who might be enticed by other non-banks and their clever marketing gimmicks.

Flagstar probably isn’t the most exciting place to get a mortgage, but they’ve been around a long time, are a multi-billion depository institution, and are probably highly competent when it comes to closing loans, especially outside-the-box home loans.

If you’re taking the time to gather multiple mortgage quotes, Flagstar Mortgage should certainly be on your list of lenders to call to at least see what they can do for you and at what cost.

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