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Published: May 31, 2023 11 min read

Home equity loans and home equity lines of credit (HELOCs) let you borrow money by leveraging the equity in your home. Because these loans are backed by a valuable form of collateral (that is, your home), they typically offer lower APRs than unsecured loans like credit cards or personal lines of credit.

In this guide, we'll look in-depth at Flagstar home equity loans and HELOCs. We'll review the pros and cons of using Flagstar for your next home equity loan and how it stacks up to the competition.

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Best for Large HELOCs

A home equity line of credit (HELOC) is a form of revolving credit similar to a credit card or personal line of credit. A HELOC lets you borrow up to a set dollar amount for a draw period, which is then followed by a repayment period. However, you can start paying before that repayment period thus freeing up more credit from which you can borrow again.

Like a home equity loan, a HELOC uses your home as collateral. If you default on your debt obligation, the lender can seize your house as compensation.

While many banks offer HELOCs of up to $750,000, Flagstar grants HELOCs of up to $1 million. This makes Flagstar an excellent choice for individuals with high value homes and who need access to larger lines of credit..

Flagstar Home Equity Loans Pros and Cons

  • High maximum loan amounts
  • No closing costs
  • Automatic payment discount available
  • Charges a $75 annual fee for HELOC

Pros explained

Flagstar stands out for offering high maximums on its home equity loan products, zero closing costs and discounts for automatic payments.

High maximum loan amounts

Flagstar offers its customers a ceiling of up to $1 million for its HELOC and home equity loans. Keep in mind that these amounts depend on the value of your home and how much you still owe on the property.

Like most lenders, Flagstar prefers borrowers with a combined-loan-to-value ratio (CLTV) of 80% or less. CLTV is determined using the mortgage’s outstanding balance and the current value of your home.

Let’s say your home has an appraised value of $250,000, and you still owe $100,000 on your mortgage — this means you have a CLTV of 40%.

No closing costs

Closing costs — which can include origination, underwriting, appraisal and/or recording fees — can range anywhere between 2% to 5% of the loan total. Many banks will charge these fees and they could significantly undercut the loan proceeds you receive.

Flagstar does not charge closing fees on its home equity loan products. However, if you open a HELOC with Flagstar, note that you'll need to keep it open for at least 36 months, or you may be on the hook for closing costs.

Automatic payment discount available

Flagstar offers a 0.25% rate discount on both HELOANs and HELOCs when you set up automatic monthly payments through a Flagstar bank account. This could potentially save you thousands of dollars across the life of your loan.

Cons explained

Flagstar has some potential drawbacks, including no online application option, limited geographic availability and poor customer satisfaction rates.

Limited availability

Flagstar only has branch offices in California, Michigan, Indiana, Ohio and Wisconsin. While HELOCs are available for residents of most states (except Texas), Flagstar home equity loans are limited to those living in the states where there are physical branches.

To check if you’re eligible to apply for a home equity loan or if one of Flagstar’s divisions, such as Desert Community Bank, offer similar solutions in your area, you simply need to enter your zip code. For HELOCs, however, you can apply online and over the phone.

Charges a $75 annual fee for HELOC

Flagstar charges an annual fee of $75 for HELOCs, and this is only waived during the first year. After this period, customers are charged this fee yearly for the life of the line of credit.

Flagstar Home Equity Loans Offerings

Flagstar offers home equity loans and home equity lines of credit, which can be used for major expenses like home renovations, tuition payments, medical bills or debt consolidation.

Home equity loan

A home equity loan is a term loan secured by the value of your home. With this loan type, you receive the full value of the loan upfront in a single lump sum. Payments begin a month after you receive the loan.

Flagstar offers loan amounts from $10,000 up to $1 million for 1- to 4-unit residential homes and modular homes. You can choose between a 10, 15 and 20-year repayment schedule.

Like with most lenders, Flagstar’s APR varies depending on the property state, loan amount and loan term, and includes an estimated 15 days of prepaid interest. Flagstar doesn’t impose closing costs, however, borrowers are responsible for any state charges or fees, and property insurance.

Home equity line of credit (HELOC)

Flagstar lines of credit are available for amounts of $10,000 up to $1 million, and for borrowers with a CLTV of 89.99% or less. (You can check Flagstar’s page for current rates.)

Flagstar HELOCs have a 10-year draw period followed by a 20-year repayment period. In addition, you can choose between two payment options: interest-only or principal and interest payments.

Although Flagstar waives closing costs, you must maintain the HELOC open for at least 36 months. If you repay or close the line of credit before this time, the costs will be passed to you, which can include title, appraisal and recording fees. Flagstar HELOCs also have a $75 annual fee, although that’s waived in the first year.

Flagstar Home Equity Loans Pricing

Flagstar doesn’t charge closing costs on home equity loans or HELOCs.

Your individual rate will vary based on a variety of factors, such as your credit score and debt-to-income (DTI) ratio. You can generate payment estimates through Flagstar's online home equity calculator. However, keep in mind that this estimate may differ from your final rate offer.

Other fees to consider include a $75 annual fee which is applicable to all Flagstar HELOCs. The fee is waived for the first year only, and charged on a yearly basis thereafter for as long as the line of credit remains open.

Flagstar Home Equity Loans Financial Stability

As per Fitch Ratings, a major credit rating bureau, Flagstar has a stable financial outlook. The rating considers Flagstar’s improved servicing performance and portfolio growth along with its parent company’s support and financial structure.

Flagstar Home Equity Loans Accessibility

Flagstar has over a 100 physical branches throughout California, Michigan, Indiana, Ohio and Wisconsin. However, its banking services and some loan products are available for residents in most states.


Residents in California, Michigan, Indiana, Ohio and Wisconsin have access to both home equity loans and line of credit (HELOC), whereas residents in all other U.S. locations — except for Texas, Puerto Rico and U.S. Virgin Islands — can apply for a HELOC online. Banking services are also available for residents in most states.

Note that some transactions may require you to request service over the phone.

Contact Information

Flagstar offers multiple forms of customer service. These include:

  • Phone: You can reach a Flagstar customer service representative at (888) 248-6423 between 7:30 a.m. and 9 p.m. ET from Monday to Friday and between 8:30 a.m. and 6 p.m. ET on Saturdays.
  • Flagstar Direct Lending: You can contact a Flagstar loan representative to get information on its loan products and rate quotes at (877)-374-3562, Monday to Thursday from 8:00 a.m to 8:00 p.m. ET.
  • Live online chat: Flagstar offers online chat with a live representative on their website.
  • Email: To contact Flagstar via email, scroll to the bottom of its customer support page and fill out the relevant boxes with your personal information and message.
  • Snail mail: You can also mail your inquiries to Flagstar Bank P.O. Box 660263 Dallas, TX 75266-0263

User experience

Flagstar offers an user-friendly online experience, making it easy for customers to apply for most banking and loan products online. It offers both an online banking services portal and mobile app to manage everyday transactions, including paying bills and money transfers. It’s also compatible with Zelle, so you can send and receive money to others.

In addition, Flagstar has an online mortgage servicing center — MyLoans — where you can make online loan payments, review statements and view transaction history.

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Flagstar Home Equity Loans Customer Satisfaction

Online reviews and survey data present a mixed picture of Flagstar's overall customer satisfaction level.

Flagstar scored slightly below the industry average on J.D. Power's 2022 U.S. Mortgage Servicer Satisfaction Study.

On the Better Business Bureau (BBB) website, it holds a A- rating. In the last 12 months, it has closed around 170 complaints, and approximately 400 complaints within the past three years. Customer complaints center primarily on poor communication practices, high fees and issues with the company website.

Flagstar Home Equity Loans FAQ

Is Flagstar Bank reputable?

With branch offices in five states and a nationwide presence, it's a well-established financial institution with a stable financial outlook as measured by Fitch Ratings.

Does Flagstar Bank offer other home loans?

Yes, Flagstar Bank offers a wide array of home loan options, including FHA, VA and jumbo loans.

How does the Flagstar Home Equity Loan application work?

You can begin your Flagstar Home Equity Loan application online and upload loan documents using their online portal. However, you may have to contact a Flagstar representative in person or over the phone to complete some parts of your loan application . Before you begin, use Flagstar's free online estimator tool to get a sneak peek of your home equity loan offer.

How we Evaluated Flagstar Home Equity Loans

We assessed Flagstar Home Equity Loans using the following criteria:

  • Accessibility
  • Availability
  • Cost including APR and various fees
  • Customer service
  • Customer satisfaction
  • Financial stability

Summary of Money's Flagstar Home Equity Loans Review

With home equity lines of credit of up to $1 million, Flagstar is a great option for homeowners with high-value homes and considerably high equity on their homes.

Flagstar HELOCs are available for residents in all states, except Texas, whereas its home equity loans are limited to residents in California, Michigan, Indiana, Ohio and Wisconsin.