Flagstar Bank was chartered in 1987 as a federal savings bank and has grown to the sixth-largest bank mortgage originator nationally and the second-largest savings bank in America.
The bank features a wide range of consumer, business, and commercial products and services that are carefully customized to each individual’s needs. Additionally, Flagstar extends its community outward in supporting homeownership and financial well-being efforts among its neighbors along with providing special grant programs, down payment assistance, and CRA mortgage programs. These programs and services extend across all fifty states, so no matter where you live in America, you should have easy access to one of their brick-and-mortar institutions.
Flagstar Bank features many useful tools that people can use to better their finances and invest in their futures. Among all of these tools are many highly specialized options for individuals to access financial advice and aid where it best meets their personal needs. The professional loan program is one such program. It provides physician mortgage loans to medical professionals in need of financing for home purchases, taking into account their very different financial criteria to craft a plan that meets their needs.
Generally, you must have a FICO credit score of at least 700 to qualify for any physician loan through Flagstar Bank. It is the minimum required credit score for loans that contribute to the purchase of a single-family detached home. Fortunately, deferred student loan debt from medical school may not affect qualifying loan amounts.
Anyone who qualifies for the loan can receive 100% financing on a loan up to $850,000 without private mortgage insurance (PMI), but those who qualify for this loan must have a FICO credit score of at least 720. Low down payment options are available for loans up to $1,500,000 and require a FICO credit score of at least 710. 80% financing is available for loans of up to $1,750,000 without PMI.
5/1 and 7/1 adjustable-rate mortgages (ARMs) are an option for qualified individuals, and purchase and rate/term refinancing options are available for primary residences.
Eligible parties include Medical Doctors (MD), Doctors of Dental Surgery (DDS), Doctors of Dental Medicine (DMD), Doctors of Osteopathy (DO), Doctors of Podiatric Medicine (DPM), and Doctors of Veterinary Medicine (DVM). Non-occupant co-borrowers are allowed on most plans.
No PMI requirement
Flagstar Bank, like many other physician mortgage loan programs, requires no private mortgage insurance (PMI) for an individual to be able to take out a loan. This is great news for physicians looking into Flagstar for their home loan needs. Without PMI, you are saved from having to spend hundreds of extra dollars a month on the insurance that doesn’t even protect you. Instead, the insurance is designed to protect banks if you miss a payment. Therefore, it’s no surprise that it can become quite costly. On average, PMI will cost traditional home loan borrowers 20% of the total cost of their homes, but those who chose to go with a physician mortgage loan from Flagstar won’t have to worry about all of those extra expenses.
Flagstar is one of the most locationally diverse physician loan banks in America. Unlike many of its competitors, Flagstar has locations in all fifty states so you can be sure that a location is always close by. This makes banking even more convenient because you won’t have to drive long distances to get great rates, nor will you need to settle for a lesser bank just because they are physically closer to you. With Flagstar, you can truly have your cake and eat it too.
High credit score requirements
Flagstar Bank has some of the highest credit score requirements for physician mortgage loans in the business. Where most banks will list a minimum FICO credit score at 680-700 points, Flagstar requires 700-720 for all of their physician loan options. This can make getting a loan particularly tricky if you’ve had any slip-ups with payments or credit card mistakes in the past. Those can be hard to bounce back from with your credit score, and these loan programs don’t offer much forgiveness in that way.
Limited housing choices
With Flagstar, you’re limited to only being able to purchase a single-family detached home, but if that’s not the kind of home you’re looking for, you may need to look for another loan provider. Flagstar doesn’t support condominiums, townhomes, or second homes. They also will not let you use a physician mortgage to finance the construction-to-permanent home of your dreams. While this may not be an issue for everyone, it’s definitely something you should consider before you accept a loan.
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Jack is the Head of Content & SEO at LeverageRx, a personal finance company exclusively for doctors.