Flagstar Bank Mortgage Review 2024
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Our Take
5.0
Flagstar Bank stands out for its range of accessible loans and programs, including no-down-payment loans, localized loans with flexible requirements and a number of down payment grant options. In July 2024, it was announced that Mr. Cooper would acquire Flagstar’s mortgage operations, along with 1.3 million current mortgage customers. The deal is expected to close by the end of the year.
Pros
- Conventional loan terms extend to 40 years, which is unusually flexible.
- Offers options for high-balance mortgages.
- Offers specialized mortgages for professionals, such as doctors and lawyers, starting their careers.
- Reported average time to close (20-30 days) is faster than industry standard.
Cons
- The lender’s mobile app is focused on banking, not mortgages.
- Conventional fixed-rate mortgages require a 5% minimum down payment, higher than some competitors.
Lender | Min. credit score | Min. down payment | |
|---|---|---|---|
580 | 3% | Visit Lenderat New American Funding at New American Funding | |
620 | 3% | Visit Lenderat NBKC at NBKC | |
580 | 3.5% | Visit Lenderat Rocket Mortgage, LLC at Rocket Mortgage, LLC |
Full Review
Flagstar is a large national bank. Its parent company, New York Community Bankcorp, is headquartered in Hicksville, New York. Mortgages are available in all 50 states, though some loans and programs are restricted by area.
🏠 Popular loan types include: fixed or adjustable rate; conventional; VA; FHA; jumbo; rate-and-term or cash-out refinance
🔑 Specialty loan options include: USDA; no-down-payment “Destination Mortgage” loan; construction and renovation loans; professional loans; multiple property (7-10 units) loans; high-balance loans; interest-only loans; co-op loans; loans for manufactured homes
💵 Home equity borrowing options: home equity loans
In July 2024, it was announced that the lender Mr. Cooper had acquired Flagstar’s mortgage origination technology and mortgage servicing rights. A mortgage servicer handles loan payments. In a statement, Mr. Cooper’s chairman and CEO Jay Bray said “we have the operational capacity to onboard Flagstar’s customers with a smooth and positive experience, which will be our top priority.”
According to a representative from Flagstar, borrowers moving to Mr. Cooper will receive a transfer notice and new loan number close to their transfer date.
Flagstar Bank also also offers the following down payment assistance programs:
Flagstar Gift Program, which offers up to 3% of the purchase price to qualified first-time home buyers (up to $3,000 in most states and $10,000 in Arizona, California, Florida, New Jersey and New York).
Flagstar Power-Up Program, which offers up to $8,000 to eligible first-time home buyers in select census-designated metro areas.
» MORE: How to apply for a mortgage
How we score Flagstar Bank mortgages
Every year, NerdWallet writers and editors use the latest data and independent research to score lenders on an overall rubric, reflecting factors that are most important to mortgage borrowers. Select Why This Category Matters below to learn more.
Flagstar Bank has a NerdWallet home loans rating of 5 stars overall. Here’s a breakdown of this year’s score.
Category | Star rating |
|---|---|
Average mortgage rates and fees | |
Mortgage rate transparency | |
Variety of loan types | |
Customer experience |
- Why This Category Matters
Average mortgage rates and fees (30%)
Our team analyzes federal data to compare mortgage lenders’ origination fees and offered mortgage rates, measuring annual averages across all loan types, as reported by the lenders. The lowest combination of average rates and fees earns the highest star rating in this category. (It’s worth noting that loans considered higher risk, including those such as FHA loans that are easier to qualify for, often have higher interest rates and fees.) Pro tip: In some cases, paying upfront fees may lower a borrower’s mortgage interest rate.
Mortgage rate transparency (25%)
We check how straightforward it is to comparison-shop rates online. NerdWallet’s transparency ratings are higher for lenders that post sample rates on their sites, and highest for sites with self-serve tools that allow shoppers to see what rates might be like for their particular loan. Pro tip: Borrowers who compare customized rate quotes by applying to three or more lenders could save thousands of dollars over the life of their loan.
Variety of loan types (25%)
Finding the right mortgage is different for each borrower. The highest star ratings in this category are awarded to lenders that our research shows offer a wide range of loan types, improving the odds that a borrower will find the best match for their needs: options for purchase and refinance; fixed-rate and adjustable-rate loans; government-backed FHA, VA or USDA loans; renovation or construction loans; and home equity loans or HELOCs.
Customer experience (20%)
How easy is it to interact with this lender? The highest-rated lenders in this category offer features that are convenient and clarifying for borrowers, such as: an online application, multiple customer service options, a helpful mobile app and candid closing timeline communications.
Flagstar earned bonus points for offering programs aimed at first-time home buyers, loan products with low credit score minimums and mortgages for manufactured homes.
What borrowers say about Flagstar Bank mortgages
NerdWallet’s lender star ratings assess objective qualities, including rates, fees and loan offerings. To help you understand borrowers’ subjective experiences, NerdWallet has gathered customer satisfaction ratings from J.D. Power and Zillow. We also contacted Flagstar customer support.
→ Below-average score in J.D. Power’s 2024 U.S. Mortgage Servicer Satisfaction Study.
Score: 580 out of 1,000. Industry average for servicing is 606.
→ Excellent customer rating on Zillow.
Customer rating: 4.97 out of 5, as of the date of publication. Rating reflects more than 3,000 customer reviews.
🤓 Our Nerds say…
Flagstar clients can reach customer service via phone or online chat. When we tried the online chat, we were immediately connected with a representative who was able to quickly answer all of our questions.
Flagstar also has branch locations in Arizona, California, Florida, Indiana, Michigan, New Jersey, New York, Ohio, and Wisconsin.
Alternatives to a home loan from Flagstar Bank
We recommend comparing mortgage rate offers from three or more lenders.
First-time home buyers and buyers looking for flexible borrowing requirements can find options at PNC Bank.
Borrowers who are interested in unusual loan types (such as physician loans or ITIN loans) may want to explore Rate.
More from NerdWallet
NerdWallet’s overall ratings for mortgage lenders are evaluated based on four major categories: variety of loan types (purchase, refinance, fixed and adjustable, for example), ease of application, rates and fees and rate transparency. Among the factors we consider when scoring these categories are options to apply for and track loans online, the level of detail about mortgage rates on lender websites and our analysis of the rates and fees lenders reported in the latest available Home Mortgage Disclosure Act data. These scores generate ratings from 1 star (poor) to 5 stars (excellent).
