Discover Home Loans

Discover Home Loans Reviews

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Written by Taylor Sansano
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Edited by Jon Bortin

About Discover Home Loans

This profile has not been claimed by the company. See reviews below to learn more or submit your own review.

Discover is a well-known and well-regarded banking and credit company that offers refinance loans and home equity loans. Discover does not offer purchase loans, so it’s only available for current homeowners—not new buyers. Loan amounts range from $35,000 to $300,000, with fixed rates and no origination fees.

Pros
  • No money due at closing
  • Fixed rates and payments
  • 10-, 15-, 20- and 30-year terms
  • Customer service seven days a week
Cons
  • Limited loan products
  • Loan amounts only up to $300,000

Rates

Discover only offers fixed-rate loans, so if you are looking to refinance to an adjustable-rate mortgage, you’ll need to look for another lender. The main benefit of a fixed-rate loan is that your monthly mortgage payment will never increase throughout the lifetime of the loan.

Discover publishes annual percentage rate (APR) ranges for both its refinance and home equity loans. At the time of publishing, the APR ranges for both home equity loans and refinancing are 5.99% - 12.99%.

According to the company, the APR is based on factors such as your creditworthiness, property information including how much equity is left after the loan is disbursed and the loan amount.

Application process

Borrowers can apply for a loan with Discover online or by phone. The online process is simple, with only a few steps to complete. You’ll need to provide your address, Social Security number, income information and other personal information so make sure you have that information on hand. Discover doesn’t offer an official pre-qualification step.

After getting approved, you can easily upload the required documents through Discover’s digital file system and track your application through a customer portal. This step typically takes between one to two weeks. Its underwriting department will take another three to four weeks to make its final decision.

Once you’re approved, closing takes between one and two weeks. Jaclyn from Missouri said Discover made closing convenient, noting, “I loved being able to work the closing around our schedule.”

Discover Home Loans application features

Loan types

Discover Home Loans offers only refinance loans and home equity loans. Loan amounts from Discover range from $35,000 to $300,000 and have a variety of repayment terms.

Refinancing

Discover Home Loans offers a fixed-rate refinancing loan that comes with no closing costs or appraisal, application, or origination fees. You can refinance with Discover to get cash out of your equity, get a lower rate, convert to a fixed-rate loan or change the loan term.

Refinancing is a good option when interest rates are low so you can save money on interest over the length of the loan.

Home equity loans

Discover home equity loans allow customers to borrow up to $300,000 in one lump sum, secured by their home equity. As with its refinance loans, it is a fixed-rate loan and there are no closing costs or other fees. Discover home equity loans can be used for a variety of purposes including debt consolidation, home repairs and paying for major expenses.

A home equity loan is a good option when you need extra cash and want a fixed-rate payment. However, be aware you're using your house as collateral and you could lose your home if you don't make the payments.

Requirements

Discover requires a 620 credit score and a debt-to-income (DTI) ratio less than 43% to qualify for a refinance or home equity loan. The property securing the loan must be a single-family home, condo, town home or planned unit development; investment properties, manufactured homes and properties over 20 acres are not eligible.

Discover also requires verifiable employment and income. Based on your income, debts, credit score and other factors, the company determines how much you can borrow and your rate.

For information about other loan types besides refinance and home equity loans, read our guides on FHA, VA and USDA loans.

Costs and fees

The overall cost of your loan depends on the amount you borrow, your APR and your repayment term. Since there are no fees attached to these loans, those will not be part of your balance. Additionally, Discover Home Loans pays all closing costs incurred during the loan process, which means you aren’t required to bring any cash to closing.

Note that if you pay off your loan balance in full within 36 months after taking out your loan, you will be required to reimburse Discover up to $500 for closing costs, including title fees, recording fees and mortgage and transfer taxes. Residents of certain states are exempt from this reimbursement requirement.

FAQ

What is Discover Home Loans?

Discover Home Loans is a lending branch of the financial services company Discover, one of the biggest credit card issuers in the United States, offering refinancing and home equity loans with no closing costs.

Is Discover Home Loans a good choice?

Discover Home Loans can be a good option if you are looking to refinance your existing mortgage or take out a home equity loan. Although there are no closing costs, loans amounts are capped at $300,000 and you cannot check your rate without a hard credit inquiry. So, if you're looking for a larger loan amount or prefer a soft credit check (which does not affect your credit score), you'll need to choose another lender.

Where is Discover Home Loans available?

Discover Home Loans is available to borrowers in all U.S. states except Iowa and Maryland. It is not available in any of the U.S. territories.

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Discover Home Loans Reviews

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    Customer Service

    Reviewed Dec. 12, 2024

    Discover Home Loans will promise you all the right things to harvest your information, but they are unlikely to see you through to closing. You will spend weeks responding to their emails, uploading your personal information, filling out forms, answering questions, and jumping through hoops before your information is even reviewed by an underwriter who will not communicate with you. Instead, you will receive a denial via email and find your application closed, often outside business hours when no one is available to explain. You will communicate with some of the nicest salespeople who will make you believe you're just one document away from moving to closing. However, these individuals have no influence over your approval and cannot assist you when you are ultimately denied a loan.

    Discover Home Loans will sell your information as soon as you submit your online inquiry, and you will be bombarded with offers for loan alternatives, which you will decline because Discover Home Loans promised a larger loan at a better rate. Then, a month after the negative impact of the credit inquiries, Discover Home Loans will stop communicating with you. You will have to start the process over with a reputable lender, explaining the previous credit inquiries. Do not be swayed by this bank's well-known name. Their practices lack ethics. They will use obscure reasoning for denial; for instance, in my case, as a small business owner, being a co-guarantor on business obligations was a problem, despite that being standard for S-corps. My income does not reflect many of my expenses that are legitimately the business's responsibility.

    From day one, they had my credit report, which showed scores above 740, and two years of tax returns with a full list of monthly obligations, accompanied by documentation on how they were expensed. It wasn't until over three weeks later, when I was supposedly being transferred to underwriting to close the loan, that a decision was made in less than 12 hours that I did not meet "eligibility criteria" and I was offered no opportunity to contest the decision. This is despite having had a credit account in good standing for 30 years with Discover Bank, which meant nothing to them.

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    Customer Service

    Reviewed Nov. 22, 2024

    This company needs major communication training between the bankers and the underwriters. Wasted weeks trying to get a clear response on what exact documentation they needed as I sent them everything else in a timely manner, and NO ONE could give me a straight answer. I withdrew my application and went with Figure Lending- sooo much better!!! My LOC was funded in days.

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      Process

      Reviewed Oct. 15, 2024

      Had no issues with my equity loan. Process took about 5 weeks. Everything was done online except closing which was done at my home. Funds were deposited into my account a week after close. I was kept up to date along the way. All in all a very smooth process.

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      Customer ServicePunctuality & SpeedStaff

      Reviewed Oct. 15, 2024

      Discover Home Loans is trash. They are so compartmentalized that you will speak to 100 people, going over the same information so many times. As well, the people you do speak with can only follow transcripts and check boxes. They cannot answer questions outside of their narrow domain. You will spend countless phone calls, speak to hundreds of people, spend money for documents you do not need, only to be declined for asinine reasons like the PREVIOUS owner of the house paid a mortgage payment over thirty days late even though their payment history has nothing to do with you or your payment history or your credit rating. In my case, the person was actually dead. Yet, you cannot speak to anyone who can use any common sense. If your scenario does not fit their boxes, months later after time, frustration, and money, you will be denied. My experience was literally horrid!

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      Staff

      Reviewed Aug. 14, 2024

      Worst company. They drag you along for 5 weeks and then say no. The process for buying a home is easier than trying to get a Discover home equity loan. Most incompetent people. Avoid this company at all cost.

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      Customer Service

      Reviewed Aug. 12, 2024

      Worst place to get a home equity loan. Customer service has left the building. They don't care about your credit. They won't return your calls. They act like it's their money. You be better off going to the dollar store or walmart. I'm done with Discover Home Loans for life.

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      Customer ServiceProcess

      Reviewed Aug. 10, 2024

      I wouldn’t consider this company when it comes to home equity loans. First off, my loan was pre-approved and went through the process. Carlos at the Arizona office had no clue when it came to emails. I’ve sent him a lot of paperwork that they required but then they want me to send it again and again. It’s the constantly stress of it all. They would tell you that everything is fine but make up stuff saying you're over this amount while it was their fault not giving us the correct amount being owed. They made this process long and unsatisfactory. They just rejected my application before closing which is unethical. I had provided them what they wanted but don’t want to listen. I would give them a 0 if it was available.

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      StaffProcess

      Reviewed June 21, 2024

      This process was unfair and disgrace. After pulling my credit from all 3 credit bureaus and asking 20 docs, I was rejected and given the reason by mail that it was due to my property type not eligible... When I called to learn more, they changed the reasons. The issue is with the condo building insurance doc. I was told that this went to the "fraud dept" and here it ended. No one contacted me asking anything. There was no fraud or anything wrong. Maybe they wanted a different doc and I misunderstood but no one followed up asking anything.

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      Customer ServicePunctuality & SpeedStaff

      Reviewed June 5, 2024

      We tried to get a 2nd mortgage with Discover Home loans. We always had a good experience with their credit cards so figure why not. Well they requested more documents than I have ever seen in my life. I am self-employed and own two companies. My husband is a w2 employee. We worked at all the requested for months. They stated we were perfect for the loan. Our credit is in the 700’s. After 40 calls back and forth our banker said we looked great, she was submitting to underwriting. They denied us in about 1 day and claimed our debt to income was double what it is.

      When I requested a call I did get one but the explanation was garbage. They basically don’t really count my self-employed income but say they do but they don’t. My businesses pay my cars and other stuff much like any business owner. Both have money in their accounts. Or personal savings has money as well. Not to mention our home has about 300k in equity and we were taking nowhere near that. They wasted my time. Did a hard pull on my credit and I plan on complaining till I collapse. Horrible company!! I say let’s all get together and take them down.

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      Reviewed May 16, 2024

      Discover Home Loans are a bunch of incompetent morons. I’m an over 800 credit score with a debt to income ratio of 24%. Sent them all documents requested. Only to have to do it 10 different times. While speaking to a different person every time I called. Was extremely frustrating. Don’t waste your time with them.

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      Discover Home Loans Company Information

      Company Name:
      Discover Home Loans
      Website:
      www.discover.com