Flagstar Bank is a relative newcomer into the banking scene. It received a charter to open in 1987 under the name of First Security Savings Bank. Five years later, the bank expanded its lending department to offer home loans nationwide. After years of expansion and reaching the billion-dollar asset milestone, the bank changed its name to Flagstar Bank, a name chosen by employees in a contest.
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What Is Flagstar Bank and How Does It Work?
Based in Michigan, Flagstar Bank is a full-service community bank providing checking and savings accounts, investment services, and retirement planning. Flagstar is most lauded for its mortgages. For those shopping for a mortgage, add Flagstar to your list of home lenders worth considering.
Flagstar Bank Mortgage Features
Flagstar offers a large variety of home loans and home improvement loans including government-backed loans from the VA, FHA, and USDA. Government-backed mortgages are designed for first-time homebuyers or individuals with lower credit scores or a smaller down payment. Flagstar Bank has several notable features when it comes to its home loans.
Although Flagstar Bank is based in Michigan, the financial institution has loan advisors throughout the country to help new buyers with the mortgage process. You can start the process online, at which point the nearest loan advisor will be assigned to you to help you along the steps. Or you could call Flagstar’s customer service at 1-855-403-0726 for help with the online process or to find out where the nearest loan servicing office is.
The first step when choosing a mortgage lender is to find one with the lowest interest rates and fees. You’re probably taking out a mortgage loan to repay over 30 years. A small difference in the interest rate can cost (or save) you tens of thousands of dollars over the life of the loan.
Fees are due at closing and can really add up. Some loans come with lower fees but a higher interest rate and vice versa. It’s important to know what fees a lender is charging ahead of time. Typical closing costs can cost between two and five percent of the loan amount, so the lower the percentage, the more money stays in your pocket. Here’s a look at Flagstar’s fees:
- Loan origination fee: $940;
- Loan origination fee for community bank or credit union members: $550;
- Appraisal fee: $250.
As mentioned, Flagstar’s bank locations are based in Michigan, but the lender has 43 loan centers in the states of:
- New Jersey;
- New Mexico;
- New York;
Flagstar’s mobile app is available for Android and iOS users. You’ll be able to monitor your accounts, check on transactions, schedule bill and mortgage payments, and deposit checks using your smartphone. All you need to do is take a photo of the check from your mobile banking app and your check will be deposited into your Flagstar Bank account from wherever you may be.
You can apply online for a mortgage and even upload your documents through the Flagstar Bank website. There’s a chat option on the website to reach out to a customer service representative if you need help along the way.
It’s always a good idea to prequalify for a home loan before you go out house hunting. By entering important information about yourself, such as income, Social Security number to verify your credit score, and other details, a lender can tell you if you’re approved for a loan — and for how much.
The last thing you want to do is go out house hunting and put an offer on a house you later find out you won’t be able to get a loan for. A prequalification letter spells out how much home loan you’ll likely be approved for, based on your current financial status.
Shopping for a home with a prequalification letter in hand is helpful because it signals to realtors or sellers you’re halfway there. A pre-approval saves time when you’re ready to go ahead with a mortgage. You already know roughly how much you’ll be able to get a mortgage approved for. Once you find the home you love, getting the loan details firmed up is faster and much easier.
Flagstar Bank also refinances home loans. Wondering whether you should refinance your current home mortgage? If you find their interest rates are significantly lower than what you’re currently paying, refinancing your home loan may make financial sense by reducing your monthly mortgage bill.
Flagstar Bank Mortgage Rates
Mortgage rates fluctuate quite a bit — you may even find that the rate you received in the morning is different by lunch time. Don’t rely on the rates you see advertised on mortgage lending websites — they are the best available rates, often reserved for borrowers with a low debt-to-income ratio and excellent credit. Your actual rate once you apply for pre-approval may be different. The current mortgage rates for Flagstar Bank’s home loans are:
- Rate for 30-year fixed-rate mortgage: 2.750%, 2.870% annual percentage rate (APR);
- Rate for 15-year fixed-rate mortgage: 2.304%, 2.523% APR;
- Rate for FHA 30-year fixed-rate mortgage: 2.750%, 3.892 APR;
- Rate for VA 30-year fixed-rate mortgage: 4.750%, 5.155% APR;
- Rate for 5/1 adjustable mortgage: 3.222%, 3.010% APR;
- Rate for 7/1 adjustable mortgage: 3.182%, 3.050% APR;
- Rate for 10/1 adjustable mortgage: 3.155%, 3.055% APR.
How to Apply For a Flagstar Bank Mortgage
To apply for a Flagstar Bank mortgage, you can visit a loan servicing branch, call or apply online. You’ll need:
- Personal information, such as your name, address, date of birth, and Social Security number;
- Information about your income and the amounts of loans and expenses you pay each month, such as rent, utilities, car loans, and student loans;
- Financial documents including the last two years of tax returns, recent paychecks, and several months of recent bank statements.
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