Flagstar Bank, founded in 1987 and headquartered in Troy, Michigan, offers home equity loans and HELOCs with branches in five states. The lender provides competitive interest rates, high loan amounts and savings in the form of interest rate discounts and no lender closing fees. Its offerings do vary by state, so you’ll have to enter your ZIP code on the website to see which APRs and loan amounts are available where you live. The details presented on this page are based on the 49546 ZIP code.
If you’re looking for a home equity loan or HELOC, here’s what to know about Flagstar Bank and its products.
Flagstar Bank snapshot
|Loan types offered||Home equity loan, HELOC|
|APR range||Home equity loan: Starting at 6.53% (with autopay)
HELOC: Starting at 3.74% (with autopay)
|Loan amount range||Home equity loan: $10,000 to $500,000
HELOC: $10,000 to $500,000
|Minimum credit score required||Not specified|
|Repayment terms||Home equity loan: 5 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.
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 5.88 percent APR. With the HELOC, rates start at 3.99 percent APR. According to Bankrate, average home equity loan and HELOC rates are 4.98 percent and 4.7 percent, respectively, as of late February 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.
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 $500,000. Repayment terms are five, 10, 15 or 20 years, giving you flexibility with your monthly payments.
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, homeowners 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 888-549-5896 to reach the bank’s home lending division. Representatives are available Monday through Thursday from 8 a.m. to 8 p.m. ET, Friday from 8 a.m. to 7 p.m. ET and Saturday from 10 a.m. to 3 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
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.