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Flagstar Bank: 2022 Home Equity Review

Flagstar Bank loans
Courtesy of Flagstar Bank
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Flagstar Bank was founded in 1987 and offers personalized financial support with 150 branches in Michigan, Indiana, California, Wisconsin and Ohio. It is headquartered in Troy, Michigan. This lender offers both home equity loans and HELOCs and provides competitive interest rates, high loan amounts, interest rate discounts and no lender closing fees. Product offerings vary by state. You can see which APRs and loan amounts are available where you live by entering your ZIP code on the lender’s website. The details presented on this page are based on the 49546 ZIP code.
Flagstar Bank prides itself on offering a personalized, service-focused experience for customers. If you’re looking for a home equity loan or HELOC and you live in one of the five states they operate in, Flagstar could be a great choice.

Flagstar Bank snapshot

Loan types offered Home equity loan, HELOC
APR range Home equity loan: Starting at 6.53% (with autopay)
HELOC: Starting at 3.99% (with autopay)
Loan amount range Home equity loan: $10,000 to $1 million
HELOC: $10,000 to $500,000
Minimum credit score required Not specified
Repayment terms Home equity loan: 10 to 20 years
HELOC: 10-year draw period and 20-year repayment period
Average time to approval Not specified

Loan details will vary by location. Loan terms and APRs presented are based on the 49546 ZIP code.

Benefits

Here are some benefits to consider before you submit an application with Flagstar Bank:

  • Competitive interest rates: The lender’s home equity loan rates start at 6.53 percent APR. With the HELOC, rates start at 3.99 percent APR. According to Bankrate, average home equity loan and HELOC rates are 4.74 percent and 3.25 percent, respectively, as of December 2021.
  • High loan amounts: The limit on Flagstar’s home equity loans and HELOCs is $500,000 — although you may be subject to lower limits based on your loan-to-value ratio.
  • No closing costs: There are no lender closing costs on the bank’s home equity loan product and no prepayment penalties. The lender also doesn’t charge closing costs on HELOCs, but you may be on the hook if you pay off the loan early.

Drawbacks

A few of Flagstar’s drawbacks are:

  • No online application: You can start the application process online by providing your contact information. But to complete the process, you’ll need to speak with a loan specialist over the phone or visit a local branch.
  • Limited geographical presence: Flagstar Bank has branches in only five states: California, Indiana, Michigan, Ohio and Wisconsin. There are home loan centers in other states, but if you want in-person service, your options may be limited.
  • Little transparency: Flagstar doesn’t disclose any eligibility requirements for its home equity products, so you’ll need to speak with a representative or apply for a loan to find out if you qualify.

Types of fees charged

There are no closing costs on HELOCs other than government taxes and fees, but you will need to pay lender closing fees if you close the account within 36 months. All HELOCs come with a $75 annual fee, waived for the first year.

Both products offer automatic payment discounts: 0.5 percent for HELOCs and 0.25 percent for home equity loans.

Loan products offered

Flagstar Bank offers various mortgage loans and refinance loans, as well as home equity loans and HELOCs.

Home equity loan

If you’re interested in a fixed interest rate and a lump-sum payment, a home equity loan may be right for you. Flagstar Bank offers loans from $10,000 to one million. Repayment terms are five, 10, 15 or 20 years, giving you flexibility with your monthly payments.

HELOC

If you’d rather have a revolving line of credit that you can access whenever you need it, a HELOC may be a better choice. With Flagstar Bank’s HELOC, you can borrow between $10,000 and $500,000, with a 10-year draw period and a 20-year repayment term.

The lender offers interest-only payments during the draw period, but there is a minimum monthly payment of $100.

How to qualify for a home equity loan with Flagstar

The property you would like to use to secure your HELOC must be your residential home, which can include one- to four-unit owner-occupied properties and modular homes. To maintain the loan or HELOC, property insurance and, in some cases, flood insurance are required.

How to get started

To apply for a home equity product, you can visit a local Flagstar Bank branch, call the bank or share some information through the bank’s website and get a follow-up call from a loan specialist, who will walk you through the remainder of the process.

During this process, you may need to provide some documentation verifying your income and information about the property.

If you have any questions along the way, you can call (800) 968-7700 to reach the bank’s loan servicing division. Representatives are available Monday through Friday from 7:30 a.m. to 8 p.m. ET and Saturday from 7:30 a.m. to 4 p.m. ET. Alternatively, you can send a message through the bank’s website.

Before you accept a loan or line of credit from Flagstar Bank, however, be sure to compare its terms with those of other home equity lenders. This process can take time, but it will help you ensure that you get the right product for your needs.

How Bankrate rates Flagstar Bank

Bankrate Score 4.0 Scoring factors
Availability 3.6 Some information on availability is not provided
Affordability 4.0 Higher-than-average APRs
Customer experience 4.3 Partially online application and Mon-Sat customer support hours

Methodology

To create our Bankrate Scores, we evaluated lenders based on availability, affordability and customer experience. Availability was assessed based on the minimum loan amount required, time to approval, days to close, minimum draw requirements, minimum credit score requirements and loan types offered. Affordability was assessed based on minimum APR, discounts and promotions offered and associated fees. Customer experience was assessed based on online application and account availability, customer support, auto payment availability and mobile app availability and ratings.

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.

Written by
Raija Haughn
Raija Haughn is an associate writer for Bankrate.com specializing in personal and home equity loans. She is passionate about helping people make financial decisions that will benefit them long term.