The Yahoo view: Flagstar Bank is a standout mortgage lender with a full roster of purchase and refinance mortgage products. In addition, Flagstar offers several assistance programs and other appealing loan options for first-time home buyers.

Flagstar Bank is a solid choice when it comes to mortgage lending. It has a large shelf of loan products, including options for borrowers with less-than-perfect credit.

One of the best features we found is an interest rate tool that provides a realistic estimate of a mortgage rate without hiding mortgage discount points in a pile of small print.

Dig deeper: Best mortgage lenders for bad credit

Key benefits

• A helpful mortgage rate tool lets you enter your credit score and the number of discount points you want to include in the interest rate estimate. This is just one reason why Yahoo Finance considers Flagstar the best mortgage lender for borrowers with bad credit.

• Borrowers without Social Security numbers will appreciate Flagstar's fixed-rate home loan program, which allows them to qualify for a mortgage with an Individual Tax Identification Number (ITIN).

• Flagstar assistance programs offer eligible first-time buyers in specific areas grants of up to $3,000, $8,000, or even $10,000 for down payment and closing costs assistance. Some limitations apply.

• There are several helpful calculators help you run the numbers on various homebuying, refinancing, and payoff scenarios.

Need to know

• Bank branches are available only in nine states; Flagstar offers purchase and refinance loans in all 50 states, though.

• Flagstar offers multiple types of mortgage loans, from FHA loans to medical professional loans. It's important to note, though, that conventional loans can actually be more affordable if you have a decent down payment and fair credit.

Learn more: What are physician mortgage loans, and who qualifies?

Flagstar Mortgage home loan product offerings

Flagstar Bank offers the following types of home loans:

• Conventional loans

• FHA mortgages

• VA loans

• USDA loans

• Purchase mortgages

• Refinance loans

• Cash-out refinance loans

• Fixed-rate mortgages

• Adjustable-rate home loans

• Jumbo loans

• Construction loans

• Second home loans

• Investment property loans

• Renovation loans

• ITIN mortgages

• Medical professional loans

• HELOCs

• Home equity loans

Flagstar Mortgage does not offer the following types of home loans:

• Interest-only mortgages

• Lot loans

• Guest house loans

• Nonqualified mortgages

• Energy efficient mortgages

• 1% down payment mortgages

• Buydown loans

• Bridge loans

• Manufactured home loans

• Piggy-back loans

Dig deeper: How do investment property loans work?

Flagstar Bank mortgage for first-time home buyers

Flagstar Bank caters to first-time homebuyers with popular government loans and low down payment options. For example, FHA loans for first-time homebuyers allow down payments as low as 3.5% and have no income limit. The Flagstar website says borrowers can "qualify with little to no formal credit history," but proof of steady employment is required.

Flagstar Bank also welcomes first-time home buyers with a "Home Loan Basics" section on its website. It explains the mortgage process and includes some fresh material such as "3 mistakes first-time homebuyers make" and "How to pick the perfect neighborhood."

A section also explains four common types of loans: fixed-rate mortgages, adjustable-rate mortgages, government loans, and down payment assistance programs.

As noted above, Flagstar offers generous grants and gifts to eligible first-timers who lack sufficient savings for down payments and closing costs.

Learn more: Best mortgage lenders for first-time buyers

Up Next

• ITIN loans: How to get a mortgage as a non-U.S. citizen

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• Mortgage rates are still increasing — is this a good time to buy a house?

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• Mortgage calculator

Flagstar Bank mortgage for home equity lending

Banks have deposits that allow home equity lending, and Flagstar is no exception.

Flagstar Mortgage home equity line of credit

Flagstar's draw-cash-as-you-need-it home equity line of credit (HELOC) has a variable interest rate and is available for $10,000 to $1 million.

Flagstar Mortgage home equity loan

The lump sum option, a home equity loan, is available in the same amounts but with a fixed interest rate.

Flagstar HELOC and home equity loan fees

The HELOC has no bank closing fees if the line of credit remains open for 36 months. A 0.25% interest rate discount is applied if monthly payments are drawn from a Flagstar Bank account. An annual fee of $75 is waived for the first year.

The home equity loan offers the same quarter-point discount for auto draft payments. The HEL has no lender closing fees.

Flagstar also has cash-out refinancing for those looking for a lower mortgage rate while tapping their home's equity.

Dig deeper: The differences between HELOCs and home equity loans

Flagstar Bank home mortgage loan rates 2024

If you want a sense of what Flagstar will charge on a particular home loan, you must complete a short form detailing the purchase price, down payment, and the property's ZIP code. It's easy enough, and no personal information is requested.

You'll get a quick result showing a conventional loan rate, as well as a VA-backed mortgage and an FHA loan rate.

Flagstar also gives you an even better sense of the interest rate you'll qualify for when you click “Advanced Search” on the mortgage rates page.

Here, you enter the type of home (single-family, condo, or multifamily), the use (primary residence, second/vacation home, or investment), your credit score range, and how many discount points you prefer to include.

The result will be an even more detailed interest rate.

We wish more lenders would provide such a helpful mortgage rate tool.

Read more: How to get the lowest mortgage rates

How Flagstar scores on mortgage rates and loan costs

Yahoo Finance uses 2023 Home Mortgage Disclosure Act data comprised of 10 million home loan applications to score mortgage lenders on issued mortgage rates and total loan costs. We score each lender on a scale of 1 (lowest) to 5 (highest).

For example, with mortgage rates a lender with a lower score charged a higher-than-median mortgage interest rate for loans issued in 2023. A higher score would indicate a lender granted lower-than-median home loan interest rates to borrowers in 2023.

With total home loan costs, a lower score would indicate that a lender charged higher than median total home loan costs in 2023. A high rating would mean that a mortgage lender offered lower than median all-in home loan costs in 2023.

Flagstar mortgage home loan rates score: 2 out of 5 stars

Flagstar total loan costs score: 3 out of 5 stars

What this means: Flagstar offered a higher-than-median mortgage rate of 6.75% and a near-median total loan cost of $6,908.74 to borrowers in 2023.

Flagstar mortgage application

On practically every page you visit, you'll see three call-to-action buttons:

• Apply now: You can jump into a loan application.

• Call us: Speak with a loan adviser.

• Connect with us: Get in front of a loan adviser at a branch or remotely.

Flagstar mortgage preapproval

The loan application workflow starts with a contact form to connect you with a loan adviser. You can also complete a full application after providing that info.

Learn more: How to get a mortgage

Flagstar Bank mortgage calculators and home-buying tools

A stable of 10 calculators provides answers to a wide range of home-buying questions:

• What will my monthly payment be?

• How much house can I afford?

• How much will my adjustable-rate payments be?

• Is now a good time to refinance?

• What will my closing costs be?

• How do different down payments affect the cost of a mortgage?

• How much can I borrow?

• How can I pay off my loan early?

• What is my debt-to-income ratio?

• Should I get a 15- or 30-year mortgage?

There really doesn't seem to be anything missing, does there? The calculators are easy to use, mobile-device friendly, and results are displayed in simple charts and tables.

An extensive FAQ page answers over 35 common questions and includes a home loan glossary.

If that's not enough, a chat function will linger on the screen for anything else you may need to know. However, the chat function wasn't available when we tried it one weekday mid-morning.

Read more: How much house can I afford? Use the Yahoo Finance home affordability calculator.

Flagstar mortgage pros and cons

Pros

• Flagstar earns our highest 5-star rating in our Rate Transparency category. That's important when you're looking to get a feel for what interest rate you might qualify for.

• The lender also provides an above-average assortment of mortgage loan options.

Cons

• Flagstar online resources are just a little above average.

• All-in loan costs are typical. Nothing to brag about here.

• However, interest rates are higher when compared to the median rates offered by major lenders in 2023, according to Yahoo Finance analysis.

How Flagstar Bank compares to other mortgage lenders

Flagstar Bank mortgage vs. Rocket Mortgage

Flagstar Bank helps borrowers without the savings for large down payments by offering FHA loans with 3.5% down. That can make the difference between being able to buy a home — or just keep on renting.

Rocket Mortgage offers the same 3.5% down FHA loans but also has a conventional loan for eligible borrowers that allows a 1% down payment. Rocket provides a 2% grant, so you still enter the loan with 3% equity.

Rocket Mortgage review

Flagstar Bank mortgage vs. Guild Mortgage

Flagstar Bank offers down payment and closing costs assistance programs of up to $15,000 for eligible first-time buyers in specific areas.

Guild Mortgage gives income-qualified first-time home buyers a $2,000 gift card to The Home Depot, and $500 to $1,500 to apply to closing costs on a 3% down payment loan. However, Guild also has a 1% down program.

There is a lot to consider when choosing the best mortgage lender. But when they compete for your business, you win.

Guild Mortgage review

Flagstar mortgage FAQs

What happened to Flagstar mortgage?

Flagstar Bank's mortgage operations have been sold to Mr. Cooper Group, which acquired Flagstar's customers and employees. The two companies will fully integrate operations onto the Mr. Cooper platform in 2025.

Can I make a Flagstar mortgage payment online?

Flagstar's MyLoans application allows you to make online payments, schedule regular recurring payments, and view your loan balance.

Does Flagstar mortgage have a mobile app?

Yes, Flagstar's Mobile Banking app allows you to make monthly mortgage payments, have touch-free payments with a mobile wallet, and check your credit score. It’s available in both the Apple and Google Play store.

Methodology:

Yahoo Finance reviews and scores mortgage lenders with quintile scoring in five primary categories: 1) Interest rates. Using 2023 Home Mortgage Disclosure Act data comprised of 10 million home loan applications, we score mortgage lenders on issued mortgage rates below or above the annual median of reporting lenders. 2) Affordability. A measure of loan product availability and the willingness of a lender to offer government-backed loans, low down payments, down payment assistance, and consideration of nontraditional credit. 3) Loan costs. HMDA data is again analyzed, and lenders are rated based on total loan costs compared to the annual median. 4) Rate transparency. The ability of a website user to obtain a mortgage interest rate estimate. We score lenders based on whether rates are enhanced with discount points or high credit score requirements, disclaimers revealing rate assumptions, sample advertised rates, and whether adjustable or no discount point rate estimates are available. 5) Online features. An analysis of the educational material, calculators, and additional resources available to users.

Review of Nationwide Multistate Licensing System (NMLS) data on regulatory actions can trigger a penalty to the score of any lender with a consumer mortgage-related administrative or enforcement action within the past five years.

Advertisers or sponsorships do not influence ratings.

Editorial disclosure for mortgages:

The information in this article has not been reviewed or approved by any advertiser. The details on financial products, including interest rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the lender's website for the most current information. This site doesn't include all currently available offers.

This article was edited by Laura Grace Tarpley.