Table of Contents
Highlights
- Home Loan, HELOC, Interest Only HELOC
- Home Loan: From 8.04%; HELOC: From 9.49%
- n/a
- Call 844-294-9055 to speak with a loan advisor or call 800-968-7700 for 24-hour automated loan support
Flag Star Bank Flagstar, Inc. has been in business since 1987 and has grown into one of the largest mortgage-servicing companies in the country. Flagstar offers home equity lines of credit (HELOCS) in 49 states (not available in Texas) and home equity loans in the eight states where it has a presence — Arizona, Florida, Indiana, Michigan, New Jersey, New York, Ohio and Wisconsin.
As more homeowners look to leverage their home equity, Flagstar Bank makes our list of best HELOC lenders because of its nationwide availability, transparent pricing, and customer service.
Flagstar Bank: at a glance
| Types of home equity loans | Home Loan, HELOC, Interest Only HELOC |
|---|---|
| APR range | Home loan: From 8.04% HELOC: From 9.49% |
| Loan amounts | $10,000 to $1 million |
| Credit Score Requirements | n/a |
| Refund Policy | Home loan: 10, 15 or 20 years HELOC: 10-year withdrawal period, 20-year repayment period |
| Average time to approval | n/a |
Flagstar Bank’s home equity loan products are best if you already do your banking with the institution because of the bank’s autopay rebate offer. This is not a good option if you live in Texas, since the bank’s home equity products are not available there.
No mortgage lender is perfect. If you’re considering using Flagstar Bank to access some of your home’s value, consider these pros and cons before you sign up.
Pros and cons
Advantages
Additional savings options: Offers a 0.25% discount on the rate when you set up automatic payments from a Flagstar account.
Wide range of loan amounts: With a Flagstar home equity loan or HELOC, you can borrow between $10,000 and $1 million.
No closing costs: There are no closing costs charged by the bank for mortgage loans or HELOCs (unless you close your HELOC within 36 months of opening).
Cons
Limited availability for mortgage loans: Home equity loans are only available in states where Flagstar has a bank branches: Arizona, Florida, Indiana, Michigan, New Jersey, New York, Ohio and Wisconsin.
Few details: There is limited information available online about borrower requirements, including minimum credit scores.
No online application for HELOCs: To apply for a HELOC with Flagstar, you must go to a branch in person.
Home Loan Options
Home loan: When you apply for a home equity loan with Flagstar Bank, you’ll receive a lump sum of money and have three options for repaying it: 10-, 15- and 20-year terms. You can borrow between $10,000 and $1 million, provided you maintain a combined loan-to-value ratio of 80% or lower.
HELOC Loan: Flagstar’s HELOC gives you the flexibility to borrow as much as you need, when you need it, at a variable interest rate. Loan amounts are flexible, ranging from $10,000 to $1 million. You have a standard 10-year draw period and a 20-year repayment period.
Interest-only HELOC: Flagstar also offers homeowners the option of making interest-only payments on their HELOC. With an interest-only HELOC, you only pay interest on the amount you borrow during the drawdown period. Once you reach your repayment term, you begin paying both the principal and interest in full.
Cost
There are no closing costs as long as you keep your account open for at least 36 months. Flagstar Bank charges a $75 annual fee for HELOCs, although it is waived in the first year. If you borrow more than $500,000, you will have to pay for the lender’s title insurance.
How do you qualify?
While Flagstar Bank doesn’t disclose specific credit score requirements for its home equity loan products, there are some important considerations the bank makes when reviewing applications. If you’re applying for a HELOC, the property must be a one- to four-unit owner-occupied building or a one-unit second home, and your combined loan-to-value ratio can’t exceed 85% with the new line of credit added to your existing mortgage.
If you are applying for a loan based on the equity in your home, it must be a loan on your primary residence (second homes are not allowed) and the combined loan-to-value ratio of your existing mortgage cannot exceed 80%.
Applying for a mortgage loan or HELOC with Flagstar
To find out if you qualify for one of Flagstar Bank’s home equity loan options, it’s best to use the company’s website to find your location. Based on your zip code, the bank will tell you if you can apply for a HELOC and a home equity loan. HELOCs are widely available, but mortgage loans are more limited.
You can start your application for a home equity loan online. You’ll need to share a series of details about your primary mortgage — the original amount, the remaining balance, your interest rate and monthly payment — along with your driver’s license and details about your personal finances. If you don’t want to start online, you can call 844-294-9055 to speak with a loan counselor.
For HELOCs you must have a information form online and wait for a representative to contact you. You can also call 855-878-7768 to start the process.
Customer service
While Flagstar Bank offers a convenient online application, there are several ways to get in touch with a real person. You can call 844-294-9055 to speak to a loan officer over the phone. Representatives are available Monday through Friday from 7:30 a.m. to 8 p.m. ET and Saturdays from 7:30 a.m. to 4 p.m. ET. If you decide to take out a loan with the bank and need help with your payments, the company has a 24-hour loan service number: 800-968-7700.
