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If you're looking to refinance your mortgage or get a home equity loan, Discover is a strong option. It's one of the best home equity loan lenders, and its low mortgage rates and zero closing costs make it incredibly affordable. But it doesn't offer any other types of mortgages.
Discover Home Loans
Insider’s Rating
3.63/5
Recommended Credit
680
Types of Loans Offered
Conventional refinance, home equity loan
Pros
- No closing costs
- Easy online application
Cons
- Only offers mortgage refinancing and home equity loans
- Fixed-rate loans only
- Higher than average rates
Insider’s Take
If you're looking to refinance your mortgage or get a home equity loan, Discover is a strong option. It's one of the best home equity loan lenders, and its lack of closing costs make it incredibly affordable. But it doesn't offer any other types of mortgages.
Product Details
- Available everywhere in the US except Iowa and Maryland
- Loan amounts from $35,000 to $300,000
- Offers 10, 15, 20, and 30-year terms on its loans
Overview of Discover Home Loans
Types of Mortgage Products Offered
Discover only offers conventional mortgage refinancing and home equity loans. Its home loans are available everywhere in the US except Iowa and Maryland.
History of Discover in the Mortgage Industry
Discover launched its Home Loans business in 2012, initially offering conventional and FHA mortgages.
Discover's Mortgage Rates and Fees
Comparing Discover's Rates and Fees to National Averages
Discover lists the range of rates it offers on its Home Loans website. Home equity loan rates will be slightly higher than refinance rates. To get a better idea of what rate you might get based on your finances, you'll need to start an application or talk to a loan officer over the phone.
According to our review of the latest Home Mortgage Disclosure Act data, borrowers paid slightly higher-than-average rates on Discover's first-lien conventional loans in 2022.
Discover doesn't charge any origination fees on its mortgages, and you won't need to bring any cash to closing, since the lender will also pay any third-party costs you incur. The data backs up this claim: according to HMDA data, conventional borrowers getting a mortgage from Discover paid $0 in origination charges in 2022.
Discover Home Loans Overall Rating
Loan Types: 2 out of 5
Discover's mortgage offering are extremely limited. If you're looking for a mortgage to purchase a home, you'll need to look elsewhere.
Affordability: 3.5 out of 5
Discover's lack of fees makes it an overall affordable lender. But you'll need to have good credit to qualify.
Customer Satisfaction: 4 out of 5
On WalletHub, Discover has a 4 out of 5-star rating based on over 14,000 customer reviews.
Trustworthiness: 5 out 5
Discover has an A+ rating from the Better Business Bureau. The BBB evaluates companies by looking at responses to customer complaints, honesty in advertising, and transparency about business practices. Discover has no recent public scandals.
Pros and Cons of Discover Mortgage
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Advantages of Choosing Discover
If you want to refinance or get a home equity loan but you don't have a ton of cash for out-of-pocket expenses, Discover might be a good lender for you. Discover doesn't charge any fees on its mortgages, and it will also cover your third-party costs (such as home appraisal fees).
Potential Drawbacks
The biggest drawback of Discover is that it only offers mortgage refinances and home equity loans, and the loan amounts it offers are relatively low (you can only get a loan up to $300,000). You'll also only be able to get a fixed-rate mortgage from this lender.
Additionally, Discover's rates are slightly higher than average, according to our review of the latest HMDA data.
Loan Options and Terms
Loan amounts on both of Discover's mortgage options start at $35,000 and go up to $300,000. For both refinances and home equity loans, you can choose between a 10-, 15-, 20-, or 30-year term length.
With a refinance from Discover, you can do a simple rate-and-term refinance or you can borrow from your equity using a cash-out refinance.
Customer Service and Support
Customer Reviews and Ratings
Discover has good customer reviews, but the company is more widely used for its Discover credit cards than its mortgages. This makes it difficult to get a sense of how satisfied borrowers are with Discover as a mortgage lender.
Availability of Customer Support
In general, Discover customers appear to really like the company's customer service.
If you need help with an in-process loan, you can reach customer support between Monday through Friday from 8 a.m. to midnight ET, or 10 a.m. to 6 p.m. on Saturday and Sunday.
How to Apply with Discover
How to Apply
Discover makes it quick and easy to submit an online application. You can also get started over the phone.
Eligibility Criteria
Whether you're applying for a mortgage refinance or a home equity loan, you'll need a credit score of 680 and a debt-to-income ratiobelow 43%.
For its home equity loans, your CLTV has to be below 90%. This means all of the loans on your property combined can't exceed 90% of the property value.
Compare Discover to Other Mortgage Lenders
Discover Home Loans vs. U.S. Bank Home Loans
U.S. Bank Mortgageis a strong lender overall, and like Discover, it's one of our favorite home equity loan lenders.
U.S. Bank offers home equity loans in amounts from $15,000 to $750,000, so you might prefer it if you need a larger loan amount, since Discover only lends up to $300,000.
U.S. Bank also offers conforming, jumbo, FHA, VA, and construction mortgages, as well as HELOCs. You can use its mortgages for either a purchase or refinance, unlike Discover's mortgages.
Discover Home Loans vs. Bank of America Home Loans
If you're looking for a HELOC rather than a home equity loan, you might like Bank of America Mortgage, which is one of the best HELOC lenders available. A HELOC is a line of credit that borrows from your equity and may be a better option if you're not exactly sure how much you need to borrow (like if you're doing a home improvement project that will have ongoing costs).
Bank of America also offers conforming, jumbo, FHA, and VA mortgages, plus its Community Affordable Loan Solution. The Community Affordable Loan Solution is a zero-down, zero-closing-cost mortgage aimed at first-time homebuyers in certain areas.
Though its competitors generally have many more mortgage options, Discover still stands out thanks to its affordability.
Discover Home Loans FAQs
What makes Discover Home Loans stand out among other lenders?
Discover charges no fees on its mortgages and a reputation for great customer service.
Can I refinance my existing mortgage with Discover?
Yes, Discover offers both rate-and-term and cash-out refinancing.
How difficult is it to get a home equity loan from Discover?
You'll need at least a 680 credit score and a max CLTV of 90% to qualify for a Discover home equity loan.
How long does the Discover mortgage application process take?
According to the Discover website, it could take as little as 30 days for you to get your home equity loan funds. But it says the average time it takes to close is 55 days. For refinances, it says that the process typically takes six to eight weeks.
Does Discover charge any mortgage application fees?
Discover doesn't charge any fees on its home loans, and it will pay any third-party fees you incur as well.
Are Discover home equity loans good?
Discover's home equity loans are a good option if you're looking to keep your costs down, since Discover doesn't charge any closing costs and pays for any third-party fees you incur.
Why You Should Trust Us: How We Reviewed Discover Home Loans
To review Discover Home Loans, we used our methodology for reviewing mortgage lenders.
We look at four factors — loan types, affordability, customer satisfaction, and trustworthiness — and give each a rating between 1 and 5, then average these individual ratings for the overall lender rating. Lenders get higher ratings if they offer a high number of loan types with affordable features, have positive customer reviews, and don't have any recent public controversies.
Mortgage Reporter
Molly Grace is a mortgage reporter for Business Insider with over six years of experience writing about mortgages and homeownership.ExperienceIn addition to her daily mortgage rate coverage, Molly also writes mortgage lender reviews and educational articles on homebuying and analyzes data and economic trends to give readers actionable and up-to-date information about the housing market.She also tracks affordable mortgage and down payment assistance programs offered throughout the country to keep her readers informed of homebuyer programs available to them.Before Business Insider, Molly was a blog writer for Rocket Companies and helped to create Rocket Mortgage’s Shorty Award-winning podcast Home. Made.Molly is passionate about covering personal finance topics with empathy. Her goal is to make homebuying knowledge more accessible, especially for groups that may think homeownership is out of reach.ExpertiseMolly is an expert in the following topics:
- Mortgages and mortgage lenders
- Home equity
- The housing market
- The economy and the forces that impact mortgage rates
- Budgeting and saving
- Credit
- Insurance
- Retirement savings
EducationMolly earned a bachelor's degree in journalism from Indiana University.She is based in Michigan and has a dog and two cats.
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