Flagstar Bank VA Loans Review

Flagstar Bank, a prominent mortgage lender in the United States, offers a wide array of mortgage products that should satisfy the needs of most home buyers. Within its portfolio, Veterans Affairs (VA) loans stand out as a key product. Similar to many of the best VA loan providers, the bank's reputation for comprehensive services and its customer-centric approach makes it a go-to institution for people seeking to buy or refinance their homes.

In this Flagstar Bank review, we'll explore the company's set of loan products and services, pricing, customer experience and satisfaction ratings, accessibility features, and more. Continue reading to find out whether this lender is the right fit for your mortgage needs.

Best range of mortgage products

One of Flagstar Bank's most attractive features is its wide variety of mortgage options, which includes conventional loans, FHA loans, jumbo loans, USDA loans, renovation and new home construction loans, VA purchase loans, VA refinance loans, adjustable rate mortgages and more. It even offers highly specialized loans that cater to those looking to finance multiple properties at once, as well as various Community Reinvestment Act (CRA) loans that help low-income borrowers access better loan terms. This vast selection of loan products ensures that the bank can provide a suitable solution for almost any borrower.

Flagstar Bank VA loans pros and cons

Pros explained

Wide range of mortgage products and loan types

Flagstar Bank offers an incredibly wide range of mortgage products and loan types, so there’s a good chance the institution will have something to suit your needs. This selection ranges from standard mortgage products like conventional loans to more specialized loans like Community Reinvestment Act (CRA) loans.

Originates loans in all 50 states

Flagstar Bank is able to originate mortgages and other loan products in all 50 U.S. states.

Ability to apply both online and in person

Flagstar Bank makes it easy to apply for a loan; you can do it either online or in person at any of their branch locations.

Cons explained

Limited branch locations

Flagstar Bank only has branch locations in Wisconsin, Ohio, Indiana, Michigan and California. This may be a limiting factor for customers outside of these states who are searching for an in-person experience.

Home equity loans only available in some states

While Flagstar Bank does offer home equity loans, they are only available to customers who live in the states where it has branch locations.

Can't close loans online

Some lenders have begun to offer remote online closings in which customers don't need to physically be present to sign closing documents or have them notarized. However, Flagstar Bank isn't currently offering this service and customers must be physically present in order to close.

Flagstar Bank mortgage offerings

Flagstar Bank provides an extensive selection of mortgage products. The following sections examine some of its most popular home loan offerings.

VA 30-year fixed mortgage

The VA 30-year fixed rate mortgage offered by Flagstar Bank is a great option for veterans and active duty military personnel looking to purchase or refinance their homes. As with other VA loans, borrowers don’t need to provide a down payment or carry private mortgage insurance. It offers these mortgages with no prepayment penalty and in loan amounts up to $4 million (100% financing only available up to current conventional loan limits).

Flagstar doesn’t list a minimum credit score for VA loans. The VA doesn’t require a minimum credit score, but some lenders impose their own qualifications. For more information about comparing VA loan options, read our comprehensive list of VA loan tips.

15-year fixed-rate mortgage

Flagstar Bank's 15-year fixed-rate mortgage is designed to satisfy customers looking for a shorter-term loan. The company claims that the interest rates for its 15-year fixed mortgage loans are typically lower than those of its 30-year mortgages, making this a great option for borrowers who can afford the higher monthly payments. These loans are subject to the maximum conforming loan limits set by Fannie Mae and Freddie Mac (currently between $726,200 and $1,089,300 depending on the location).

30-year fixed-rate mortgage

Flagstar Bank's 30-year fixed-rate mortgage is set up just like its 15-year counterpart with the same conforming loan limits set by Fannie Mae and Freddie Mac. While the interest paid over the life of the loan may be higher than that of a 15-year loan, customers benefit from smaller monthly payments.

FHA 30-year fixed mortgage

Flagstar Bank offers FHA 30-year fixed mortgages for borrowers looking to purchase a home with a smaller down payment or those who have less than perfect credit. These loans are insured by the Federal Housing Administration (FHA) and may require as little as a 3.5% down payment from the borrower. They also feature no maximum income limitation and no strict minimum credit score requirements, though only borrowers with credit scores of 580 and above can access the 3.5% down payment option.

Jumbo fixed rate mortgage

For borrowers looking to purchase a home over the conventional loan limit set by Fannie Mae and Freddie Mac, Flagstar Bank offers jumbo fixed-rate mortgages. These loans offer features similar to those of its conventional mortgages while allowing customers to borrow up to $3.5 million on primary residences and up to $3 million on second homes.

Flagstar Bank states that these loans typically require borrowers to have higher credit scores, a lower debt-to-income ratio and the ability to put down a large down payment. Flagstar provides jumbo mortgage options without private mortgage insurance for primary residences and also offers jumbo cash-out refinance options on both primary residences and second homes. It even offers a specialty jumbo mortgage with an adjustable rate with terms of five, seven or 10 years on distinctive properties ranging from $647,200 to $3 million.

Adjustable rate mortgage

Flagstar Bank also provides customers with adjustable rate mortgage options. These loans provide a lower initial interest rate than fixed-rate loans for an introductory period. After the introductory period ends, the loan's interest rate is adjusted annually based on market conditions and other factors. Flagstar offers these loans with initial terms of five, seven or 10 years then adjustments every six months. This is an especially attractive choice if you plan on owning the home for a short period of time and want to benefit from a lower initial interest rate. Depending on economic conditions and how the mortgage market is behaving, it’s possible that your rate will go up and down during the time you’re paying off your loan.

Flagstar Bank VA loans pricing

Potential borrowers are required to answer a few different questions when obtaining interest rate quotes from Flagstar. This includes how far along you are in the buying process, your zip code and credit score, the type of property and its use (e.g., primary home, secondary home or investment property), your estimated home value and the size of your down payment. After obtaining various sample quotes, we found that Flagstar Bank VA loans offered rates in line with the national range for VA loan interest rates. Read our full guides for more information on VA loan mortgage rates and tips to get the best VA loan rates.

The company doesn't provide exact costs for its lender and origination fees but does claim that closing costs tend to run between 2% and 5% of the purchase price of the home. Some of these closing costs and lender fees include:

• Flood insurance (where required)
• Discount points
• Processing fee
• Underwriting fee
• Recording fee
• Loan origination fee
• Title insurance
• Appraisal fee
• Closing transaction fee

Flagstar Bank VA loans financial stability

Fitch Ratings, one of the leading credit rating agencies in the world, advises that Flagstar Bank has a stable financial outlook. Fitch cited the support and financial structure of the bank’s parent company, its strong portfolio growth and its experienced management team as the main reasons for its favorable evaluation. This rating indicates a strong level of financial stability for the bank.

Flagstar Bank VA loans accessibility

Availability

Although the company only has physical branches in five states (Wisconsin, Ohio, Indiana, Michigan and California), Flagstar Bank's home loan and mortgage products are available to borrowers in all 50 states — except for home equity loans, which are only available to customers who live in the states where Flagstar has branch locations.

Contact information

Flagstar offers a few different ways to get in touch with its customer service team, including an online live chat feature and an email support option that can be accessed via the contact form at the bottom of its customer support page. The company also provides several options for phone support including:

• Loan servicing/MyLoans® support: (800) 968-7700 available Monday - Friday: 7:30 a.m. to 8 p.m. ET and Saturday: 7:30 a.m. to 4 p.m. ET

• Home loan financial hardship questions/issues: (800) 393-4887 available Monday - Friday: 8:30 a.m. to 9 p.m. ET

• Mortgage lending: (855) 372-5626 available Monday - Thursday: 8 a.m. to 9 p.m. ET, Friday: 8 a.m. to 7 p.m. ET and Saturday: 10 a.m. to 4 p.m. ET

User experience

As a mostly online-focused lender, Flagstar Bank's website is an important part of its customer experience. The company's website features a modern design that is easy to navigate and well organized. The website also contains several helpful FAQs and guide sections that provide readers with in-depth information about Flagstar's products, loan application process and other relevant topics.

For those who have already become customers, the MyLoans® portal is a great way to manage and monitor your loan through its life cycle. With this feature, you can set up automatic payments, view past payment history, download forms and more.

Flagstar Bank VA loans customer satisfaction

Flagstar Bank is not accredited or rated by the Better Business Bureau (BBB). Although the company has a 1.04 out of 5-star customer rating on the platform, it has successfully closed out over 150 customer complaints in the past 12 months and many of the negative reviews are about its banking services, not its loan services.

A more accurate measure of Flagstar Bank's customer satisfaction is provided by J.D. Power's 2022 U.S. Mortgage Servicer Satisfaction Study. In this study, the company scored just below the industry average with an overall satisfaction rating of 542 out of 1,000.

How we evaluated Flagstar Bank VA loans

In order to evaluate the quality of Flagstar Bank VA loan services, we looked at several factors ranging from customer satisfaction ratings and breadth of product offerings to pricing and customer support options. The following are the most important criteria we considered:

• Pricing and fees: We evaluated the cost of taking out a VA loan from Flagstar Bank in terms of interest rates, closing costs and other fees.

• Loan types: We looked at the variety of home loan products offered by Flagstar Bank to see how many types of borrowers they could serve.

• Customer support: We assessed the number of available customer service options, such as phone and online support.

• Customer satisfaction ratings: We researched customer reviews and third-party ratings to get an overall sense of how satisfied customers are with the company's loan services.

• Financial stability: We checked financial ratings from prominent rating agencies to examine Flagstar Bank's stability.

• Accessibility: We examined how many states Flagstar Bank serves.

• Loan requirements: We looked at the minimum and maximum loan amounts, down payment requirements, credit score requirements and other eligibility criteria.

Summary of Money's Flagstar Bank VA loans review

As the 8th largest bank originator of residential mortgages for the past 12 months (as of March 2023) and with over $83.8 billion of outstanding loans, Flagstar Bank is one of the largest home loan providers in the United States. With an exceptionally wide range of home loan products and a convenient online application process, Flagstar Bank offers great options for veterans looking to purchase a home. The mortgage company's high loan limits for its VA loans make it an especially attractive option for high-end buyers.