Discover: 2022 Home Equity Review

Discover is a financial services company based outside of Chicago in Riverwoods, Ill., that offers a variety of mortgages, as well as banking and credit card services.

You can apply for personal loans, student loans and home loans with Discover. The Illinois-based lender offers home equity loans and home equity loans, but does not currently offer home equity lines of credit, or HELOCs.

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If you are looking for a home loan, the website has an easy-to-use calculator that can help you determine the loan amount and interest rate you can qualify for based on your personal financial situation. You can apply online or call a lender to apply for a home loan. Discover says it offers a low APR and extends repayment terms up to 30 years.

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Find out: At a glance

Types of home equity loans

Home Loans

APR rate

From 7.49% to 13.99%

Loan amount

$35,000 to $300,000

Credit score required

A minimum of 620

Refund Policy

10-, 15-, 20- and 30-option options

Average time for approval

Not disclosed

Homeowners with a credit score of 700 or higher will get the best rates for a Discover home equity loan, although you may qualify with a score as low as 620. Although your credit score is the most important factor that lenders use to assess whether you will pay. To repay your loan, you must have enough equity in your home (due to variable mortgage payments over the years) to qualify.

Average customers can borrow up to 80% of their home’s total loan-to-value, or CLTV ratio, but qualified borrowers can borrow up to 90% CLTV in some cases, such as Discover . Your CLTV is the ratio of your total outstanding loan balance compared to the current appraised value of your property.

What we like

  • No charge: Discover makes this process easy by taking care of all the extra costs like origination fees, closing costs and home inspections. That means you don’t have to worry about bringing in any money during your down payment process or putting extra money into your loan. However, if you pay off your loan in full within 36 months, you will be required to repay Discover up to $500 in closing costs.
  • Interest Rate Paid: In today’s rising interest environment, interest rates are attractive because your rate will not rise regardless of what is happening in the economy and financial markets.
  • Flexible payment methods: Discover offers loan terms up to 30 years, which benefits homeowners who want to stretch their financing over the long term. You can repay your home loan in 10-, 15-, 20- and 30-year terms.

What we don’t like

  • Limited loan products: Discover only offers home equity loans and mortgage repayments. It does not offer HELOCs, which are fixed-rate products, or buy-to-let mortgages.
  • Minimum Loan Amount: You must withdraw a minimum of $35,000 in Discover home equity loans, which may be higher for some homeowners, such as those who only need money for a small project or to ensure that the amount of debt is not exceeded.
  • Lowest loan amount: You can take out a maximum loan amount of $ 300,000, which may be too small for homeowners who want to finance expensive, long-term projects, and is particularly limited when compared to other lenders and -provide a maximum mortgage amount of up to $3 million. .

Home Equity Loan Options

Discover currently offers home loans and home equity loans, but does not offer HELOCs or buy-to-let mortgages. The lender also offers different types of loans such as personal loans and credit cards.

Debt

One of the benefits of a Discover home loan is that it takes care of all the upfront costs associated with a home loan. Discover doesn’t charge any application fees, and you don’t have to pay any origination fees, title fees, recording fees, mortgage taxes or closing fees (unless you pay off your loan in full within 36 months, which the case must be made. pay the closing costs up to $500).

Plus, as a borrower, no down payment means you don’t have to pay anything when you apply, saving you thousands of dollars right off the bat.

How to qualify

You must have a minimum credit score of at least 620 to qualify for a Discover home equity loan (although the lender prefers a score of 700 or higher). In addition to your credit score – which is often the most important factor that lenders consider when determining your interest rate – your rate will also depend on many factors such as your income, debt-to-income, or DTI ratio, as well as the amount you have built up on your home.

Getting started

Once you’ve spoken with a banker, the Discover website provides a detailed list of the necessary documents to help you begin your application. Be prepared to receive these documents such as your W-2 forms, bank statements and other personal financial information. Once you’ve gathered all your documents, you can upload them using the Discover Loan Application Portal, where you can manage the rest of the loan process.

Discover says that if you upload your documents online (instead of sending them by mail or fax) it will speed up your processing time. You can expect to receive your money within four full days after your loan closes, according to Discover.

Customer service

To apply for a home loan, you can call a banker or submit your application online through the Discover website. Once you set up your online account, you can access the Discover Loan Portal to track your application. Owners can reach customer support on weekdays from 8 am to 12 am ET and on weekends from 10 am to 6 pm ET.

Live phone support:

  • New Loan Applications and Advance Loan Applications: 855-361-3435
  • Home Loans: 855-295-2193
  • General Support: 855-361-3435

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