by Lauren Perez Updated April 07, 2023
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In addition to Flagstar Bank’s many bank account offerings, it also operates a vast mortgage division. You can open a number of different home loans from fixed-rate mortgages to VA Adjustable Rate loans to USDA-backed Rural Development loans. Flagstar will even work with you to create a fixed-rate mortgage with a term that works best for you. You can also obtain loans for home renovation, construction and rehabilitation. Flagstar can help you refinance your existing mortgage, too.
Flagstar provides a handful of mortgage calculators to help you better figure out and understand your home loan options. These can help you calculate how much you can borrow, your monthly payment amounts, your down payment and more.
Flagstar operates around 395 bank branches in California, Michigan, Indiana, Wisconsin and Ohio, with its mortgage division operating in a number of these locations. Flagstar also has a national wholesale network of mortgage originators, which is about 3,000 third-party members.
Fixed-rate mortgage: Right off the bat, Flagstar Bank offers two of the more common mortgage types: the 30-Year Fixed and 15-Year Fixed. A fixed-rate mortgage simply means that your rate remains the same from opening to when it's fully paid off. A 30-year fixed-rate mortgage allows you to pay off your loan over 30 years, making for smaller monthly payments. This option gives you some sort of financial stability since you’ll stick with the same payments for the life of the loan.
15-year fixed-rate mortgages typically have lower rates than 30-year loans, however. This is because there’s less time for you to potentially default on the loan. Still, since you’re paying off the loan over a shorter period of time, the monthly payments will be higher.
Flagstar can also work with you to create a custom mortgage option for you if neither of these traditional terms work for you.
Adjustable-rate mortgage: An adjustable-rate mortgage, or ARM, allows you to benefit from an occasional rate change after a set period of time. Flagstar offers 5/1 Adjustable Rate, 7/1 Adjustable Rate and 10/1 Adjustable Rate loans. When looking at an ARM, the first number gives you the length of the stagnant rate period. So for example, Flagstar ARMs will keep the same opening rate for five, seven and 10 years, respectively. Then the second number indicates how often your rate will adjust after that term ends. Each of Flagstar’s ARMs will make rate changes once a year.
Refinance: To make changes to your mortgage, whether fixed- or adjustable- rate, you’ll need to refinance the loan. This can get you a reduced rate, allow you to shorten or lengthen your term or switch from adjustable to fixed (and vice versa). Shortening your loan term allows you to pay off your loan faster and save money by avoiding years of accrued interest. On the other hand, lengthening your term gives you more time to pay it off resulting in smaller monthly payments.
You can also get a cash-out refinance with Flagstar which can help you pay for home improvements or pay off other loans.
Jumbo loan: If your home is priced above conventional amounts, you’ll need a jumbo loan. Flagstar’s Jumbo Fixed Rate and Jumbo Adjustable loans cover financing on homes from $726,200 to $3 million. A Flagstar Jumbo Adjustable loan requires a down payment of at least 10%.
Multiple Property loans: A Flagstar Multiple Property loan works when you already have seven to 10 financed properties. You can open this loan as either adjustable or fixed.
FHA loans: FHA loans are backed by the Federal Housing Administration (FHA) as a way to help individuals buy a home even with low income, bad credit or no credit. You can open an FHA Fixed Rate loan from Flagstar with a term from 10 to 30 years. You’ll need a down payment of at least 3.5%.
You can also open an FHA Adjustable Rate mortgage with Flagstar as either a three- or five-year initial fixed-rate period.
FHA 203(k) loans: This home loan can help finance your acquisition and up to $5,000 in renovation of a property. The mortgage is based on the projected value of the property with the work completed. You’ll need to put down at least 3.5% and complete the property rehabilitation within six months of closing.
FHA 203(h) loans: FHA 203(h) loans are designed to help homeowners recover from natural disasters. If your property was destroyed or damaged by a natural disaster and needs to be replaced, you can get an FHA 203(h) loan, either fixed or adjustable, within a year after the President’s declaration of the disaster to help you rebuild.
VA loans: VA loans are backed by the Veterans Administration, enabling veterans and active-duty personnel to purchase or refinance a new home. VA loans don’t require any down payment and come with much lower rates. Flagstar VA Fixed Rate mortgages range in terms from 10 to 30 years. Flagstar VA Adjustable Rate mortgages have an initial fixed-rate period of either three or five years.
State Housing Finance Agency Loan: Flagstar Bank participates in state Housing Finance Agency (HFA) loan programs. These loans, also known as state bonds, include single-family, 30-year, fully amortizing, fixed-rate mortgage loans offered in conjunction with conventional (Fannie Mae), FHA, VA, rural housing, and HFA guidelines. You can open a Flagstar HFA loan in Connecticut, Michigan and Wisconsin.
USDA/Rural Development loans: These loans are made for properties within rural areas as determined by the U.S. Department of Agriculture. USDA/ Rural Development loans are typically fixed-rate loans and don’t require a down payment.
Construction Draw loans: If you’d like to build your dream home instead of finding an existing one, a Flagstar Construction Draw loan can help you do that. During the construction/draw period, when you’re drawing on your loan, you’ll only need to make interest payments on the drawn balance. You can finance a new primary residence up to $3 million and secondary residences up to $2.5 million.
One-Close loans: A Flagstar One-Close loan allows you to construct and finance your new home all with just one application and one closing. You’ll only have to pay one set of closing costs, have a simplified schedule and be able to still make interest-only payments during construction.
FHA Construction-to-Permanent loans: Again backed by the FHA, these loans allow for both the construction and financing of a new home. There is also one application and one closing with one set of closing fees.
Renovation loans: A Flagstar Renovation loan can finance not only a home renovation, but exists to help you purchase (or refinance) a home and make renovations, too. At loan closing, renovation funds are escrowed in an interest-earning account. If any funds are left over after you’ve made all your renovations, those funds will help pay down the principal of the mortgage.