Flagstar Bank: 2025 Home Equity Review

Flagstar overview

Flagstar Bank is one of the country's largest regional banks, with an especially significant presence in the Northeast and Midwest. Headquartered in Hicksville, NY, with origins dating back to 1859, the company currently operates over 400 branches, and has $114.4 billion in assets.

Flagstar home equity products offered

Flagstar Bank offers both home equity lines of credit (HELOCs) and home equity loans, in amounts ranging from $10,000 up to $1 million. Flagstar’s home equity loans are available in every U.S. state except Texas and are only available through a retail banking branch.

Flagstar’s HELOC comes with an introductory period, a 10-year draw period and a 20-year repayment term. The bank offers interest-only payments during the draw period, but there’s a minimum monthly payment of $100. Its HELOC allows homeowners to borrow up to 85 percent of the value of their homes. 

Both home equity products have a 0.25 percent interest rate discount if you sign up for automatic payments from a Flagstar account.

How Bankrate scored Flagstar Bank 

Affordability: 5/5 

• APR: Flagstar’s APR for its HELOC is below the Bankrate national average. The company also has a low introductory APR for the first six billing cycles if the lines of credit are more than $50,000 or if the initial draw is more than half the full line amount.
• Fees: There are no closing costs on HELOCs with Flagstar Bank (other than government taxes and fees), but you’ll need to pay a prorated portion if you close the account within three years. All HELOCs come with a $75 annual fee, which is waived for the first year. 

Flagstar scores a perfect 5 out of 5 for affordability because of its low rates and the absence of closing costs.

Availability: 4.7/5 

• Loan products: Flagstar offers both a home equity loan and a line of credit, with loan limits as high as $1,000,000.
• Footprint: While Flagstar home equity loans are available in all states except Texas, it has branches in just Arizona, California, Florida, Indiana, Michigan, New Jersey, New York, Ohio, and Wisconsin — limiting in-person options for many homeowners. 
• Credit score: Flagstar’s minimum requirement for home equity loans and HELOCs is 680, on the high side of average among home equity lenders. 
• Loan minimum: Flagstar's minimum loan amount is $10,000 — ideal for borrowers who only need a small amount, and low compared to other lenders’ minimums. 
• Draw requirement: Fairly restrictive: For lines of credit of $50,000 or less, you will need to take out the full amount as your initial draw. If your line of credit is above $50,000, you need to withdraw 75% of the total line amount or $50,000, whichever is greater. A draw isn’t required at closing, but any sum taken out during the draw period must be at least $4,000. 

Flagstar earns a 4.7 out of 5 for availability due to its loan offerings, loan amount range and nationwide reach; its draw requirements drag it down a bit. .

Borrower experience: 3.7/5 

• Rate transparency: Flagstar’s site advertises its introductory HELOC APR and lowest HE Loan APR. It also indicates how high rates can rise on the HELOC (21%). But it doesn’t offer a quick way to estimate what your rate might be.
• Convenience: Flagstar has multiple draw methods for HELOC funds: online, on the phone, a check or in person at a branch.
• Customer service: Customers can reach out to Flagstar Bank at its over 400 branches, on the phone or via live online chat. 
• Fixed-rate options: It doesn’t allow borrowers to convert all or some of their HELOC to a fixed-rate loan, a feature provided by many lenders. 

Flagstar scores a 3.7 for borrower experience, primarily due to its lacking the option to convert its HELOC to a fixed-rate loan and the absence of a customized-offer tool on its site. 

Flagstar’s reputation 

While Flagstar gets an A+ rating from the Better Business Bureau, it is not BBB-accredited. Out of more than 4 dozen reviews, it gets a poor rating on Trustpilot. On the J.D. Power 2024 U.S. Retail Banking Satisfaction Study, Flagstar scores below average for banks located in the North Central region.

How to qualify for a home equity loan with Flagstar 

To be eligible for a home equity product from Flagstar Bank, you’ll need a credit score of at least 680, verifiable income and a debt-to-income ratio below 45 percent. The property you’d like to use to secure your HELOC must be your residential home, but it can include two- to four-unit properties (if owner-occupied) and modular homes. To maintain the loan or HELOC, you’re required to have homeowners insurance and, in some cases, flood insurance. You will also need at least 15 percent equity in your home, as Flagstar allows homeowners to borrow up to 85 percent of their home’s value.

How to apply for a home equity loan with Flagstar 

To apply for a home equity product with Flagstar Bank, you can visit a local branch, call the bank at 1-866-948-8613 or apply online. (Filling out the online form nets a call from a loan officer within five minutes). You can also phone 1-888-248-6423, Monday through Friday from 8:00 a.m. to 10 p.m. ET and Saturday and Sunday from 8:00 a.m. to 5 p.m. ET.