Discover Review

Sarah Pritzker

In a Nutshell

Discover Home Equity Loans is a budget friendly loan provider, with no origination fees, application fees or other upfront costs. It offers various low fixed-rate home equity loan options with online tools and great customer service.

pros

  • No application, origination or appraisal fees
  • U.S. based personal banker for personalized service
  • Ability to borrow up to 95% loan-to-value depending on credit

cons

  • No live chat
  • Application process cannot be done entirely online

Discover at a Glance

Loan Types: Home equity loans

Loan Features: No application and origination fees, no closing costs

Repayment Terms: 10, 12, 15, 20, or 30 years

Best For: Home owners with good credit scores looking for better interest rates

APR From: 3.99% - 11.99%

Overview

Discover is one of the nation's largest and fastest growing lenders for fixed-rate home equity installment loans—in fact, they recently became one of the 5 largest home equity installment loan originators in the U.S.  Discover focuses on quality customer service and helping applicants make an informed choice. The website is easy to navigate, offers helpful online tools, and prominently displays important information like loan rates and FAQs. The application process is straightforward and every borrower is connected with a U.S.-based personal banker for individual support. However, there is no live chat available and Discover only offers lump sum home equity installment loans, not Home Equity Lines of Credit loans.

Key Features:

  • Borrow $35,000 - $200,000
  • Fixed rates from 3.99% - 11.99%
  • Terms are 10, 12, 15, 20 or 30 years
  • No origination fees, home valuation fees, or application fees
  • No cash required at closing

Best for?

Home equity loans from Discover are ideal for anyone with a good level of home equity and a credit score of at least 620, who wants to remodel their home, consolidate debt, refinance their mortgage, pay for major expenses, or obtain lower interest rates. Discover doesn’t charge any loan origination or application fees and doesn’t ask for any cash up front. Discover pays for all third-party costs throughout the application and closing process including appraisal, title, settlement charges, recording, and other costs so you also have zero cash due at closing. Combined with their simple and intuitive online tools, Discover provides access to a personal banker who can answer questions and help borrowers throughout the loan process. 

Loan Features

Discover does not charge any fees for loan application, valuation, or origination and it doesn’t ask for any cash due at closing since it pays all the third-party costs itself, making it a cost-effective option for first time home equity loans or to refinance your home. The ability to talk to a personal banker who will take time to understand your financial situation is extremely valuable and helps the application process to be straightforward. Also, you can complete the application process, if you choose, mostly online. Once your application is complete, and the loan closed, monthly payments are generally low and you have the reassurance of knowing exactly how much you’ll pay each month thanks to a fixed interest rate and no hidden fees.

  • No application, home valuation, or origination fees are charged to you
  • Discover pays all the 3rd-party closing costs so you don’t need any cash at closing
  • Low fixed rates from 3.99% - 11.99% APR
  • Straightforward online application process
  • U.S.-based personal banker for support

The Application Process

Discover’s application process is straightforward and explained on their website. You can begin the application online in only a few minutes by answering standard questions about your property value, the size of your current mortgage (if you have one), your name and address, and the amount you want to borrow. The online application will be your consent to pull your credit and determine basic eligibility. If you are eligible for a loan, you'll instantly receive an online quote showing all loan options available to you. Then you'll speak to your dedicated personal banker, who will gather some additional information for your application file. If you prefer not to start your application online, you may also call Discover, and a personal banker will work with you to determine eligibility and quote you an interest rate and a monthly payment amount over the phone.

  • A copy of your driver's license or other government issued photo ID
  • A current mortgage statement
  • Homeowner's insurance and flood insurance (if relevant) declarations page
  • All applicable income documentation for each borrower and co-borrower
  • Voided check or ACH form, if you will be receiving cash out

Discover isn’t clear upfront about how long it will take until your loan is processed. Yet, personal bankers do provide estimates of how long the cycle time may be based on current averages once you're working with a banker, which happens pretty quickly. 

Pros and Cons

Discover offers more than just a personal banker. Applicants will have their own dedicated team helping them through the loan process. They’ll get:

  •  A Document Collector to help them gather the information we need to complete the loan file, 
  •  A Processor to order their title report and any additional home valuation reports needed beyond the AVM, and help them respond to any inquiries that may come back from Underwriting, and 
  •  A Closer to help them schedule their closing and make sure all closing documents are properly completed.

This team works together to ensure the loan process goes as smoothly and quickly as possible and the applicant always has the information they need. 

Applicants do have to talk to a personal banker before getting pre-qualified, instead of being able to do the whole process online. However, this is the way that Discover is able to offer much more customer-focused refinancing deals, focusing on working with any homeowner who might benefit from a home equity loan. Discover tries to tailor the loan to the borrower’s specific needs.    The loan application process is still straightforward and the explanations on the site make it all seem to be entirely uncomplicated and simple. Discover sends you all the documents that you need to sign and you can send in your documents through its secure site section. Although Discover shares plenty of valuable information on the website, one piece that’s missing is a guide to how long the loan process takes.

Loan Terms – The Bare Basics

Discover Home Equity Loans offers fixed-rate-only home equity loans for between $35,000 and $200,000. APRs start from 3.99% - 11.99%. depending on your type of lien and credit rating.

Discover doesn’t charge you any application fees, origination fees, and home valuation fees. It covers all third-party closing costs including title fees, recording fees, and mortgage/transfer taxes, but if you sell your home or pay off the loan within 36 months you will have to repay some of those costs, up to a maximum of $500. 

To be eligible for a Discover home equity loan, you need to:

  • Have a credit score of at least 620
  • Have a history of responsible credit use
  • Be able to prove your employment and sufficient income to cover your debts
  • Be a citizen or a permanent resident of the U.S.A.
  • Your home needs to be owner occupied and have enough equity in the property

Help & Support

Discover has a very easy-to-navigate website with plenty of information and educational resources, including various mortgage calculators and a blog of informative articles and infographics about home equity-related topics. The FAQ section is comprehensive but there could be more information about how long the loan process takes.

Customer support is available only by phone or email but no live chat. Although the level of personalized support is impressive, it’s a shame that there isn’t any 24/7 service other than access to their secure website, where you can manage your secure loan file.

So, Should you Borrow with Discover? 

Overall, Discover offers an attractive deal for homeowners with good credit who want to refinance their homes for debt consolidation, home improvement, education, or to make a major purchase. Discover's low fixed rates, zero application fees, intuitive online tools, and personalized service makes an an appealing choice for many borrowers. 

Physical Address

2500 Lake Cook Road

Riverwoods, IL

60015

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