Discover Home Loans Review: Learn About Discover Home Equity Loans and Mortgage Refinancing (2024)

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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.

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

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

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.