Discover Home Equity and Mortgage Refinancing Review
Discover home equity loans and mortgage refinancing are available from $35,000 to $300,000, with terms from 10 to 30 years. All Discover home loans have fixed interest rates and fixed monthly payments, offering predictability in budget planning.
Discover does not offer mortgages for purchasing a property.
To begin the loan application process, you can call Discover or apply online. Discover will access your credit report and ask you for your employment information, debt and expenses, and other information.
Within three days of completing your application, you should receive a loan estimate.
Discover will need various documents from you before you can be approved for a home equity or refinance loan. Some things you may be asked to provide include:
- W-2 tax forms and your tax returns from the previous two years.
- Names and addresses of all of your creditors, along with the monthly payments and total amount due of all current loans.
- Statements of current assets, such as individual retirement accounts, certificates of deposit, stocks and bonds.
- Account numbers and current balances of your bank accounts.
Discover will arrange for a home appraisal; after the appraisal is complete and you submit your required documents, Discover will begin underwriting your loan. The lender says it will provide you with a closing packet that includes your loan details before your closing date. Discover suggests submitting your required information and documents online to speed up the loan process.
Discover offers loans from $35,000 to $300,000, and loan terms can be 10, 15, 20 and 30 years. Annual percentage rates range from 4.15% to 11.99%, and monthly payments are fixed. The lender advertises no origination fees, application fees or appraisal fees, and no cash required at closing.
Discover’s website says the lender pays all closing costs during the loan process.
If you pay off your loan balance in full within 36 months of the loan closing, you’ll need to reimburse Discover for some of these closing costs, not to exceed $500. However, those living in Connecticut, Minnesota, New York, North Carolina, Oklahoma or Texas aren’t required to reimburse closing costs.
Discover’s website does not list any available discounts.
Aside from meeting credit score requirements, prospective borrowers of a Discover home equity loan must meet other expectations to qualify. These include:
- Verifiable, consistent income. You’ll need to provide a recent pay stub and have an employment history of at least two years. Other documents are required if you’re self-employed.
- A history of responsible credit use. Paying your bills on time and keeping your spending in check can help you show lenders that you’re a safe risk.
- Sufficient equity in your home. Your home’s value plays a big role in determining how much you can borrow. To estimate the equity, subtract debts secured by your home (often this is just the mortgage) from the home’s estimated market value. The equity you need depends on the loan amount you want.
- Reasonable debt-to-income ratio. Discover requires a debt-to-income ratio of less than 43%.
Discover has fixed loans from $35,000 to $300,000. The lender’s website says it can’t use commercial property, investment property or manufactured homes for a home equity loan.
You need a credit score of 620 or better to qualify for a home equity loan with Discover. The lender’s website says loan amounts requested above $150,000 are only available to applicants with credit scores of at least 700.
Could refinancing your mortgage save you money? Try U.S. News’ Mortgage Refinance Calculator to see if refinancing makes sense.
Discover’s home loans site says, “Not all products are available in all states or for all loan amounts,” but it does not specify in which states its products are not available.
Discover Financial Services has an A+ rating from the Better Business Bureau. In 2021, the Consumer Financial Protection Bureau received two complaints concerning Discover home equity loans and lines of credit, and both received a timely response. One complaint was closed with explanation and the other with nonmonetary relief.
Reach Discover’s customer service by calling 855-361-3435 from 8 a.m. to midnight Eastern Time Monday through Friday and 10 a.m. to 6 p.m. ET on weekends.
Borrowers can prequalify for a home equity loan online, view their loan status, upload documents and more through Discover’s secure website.
- People who want to pay minimal upfront costs for a home equity loan.
- People who need $300,000 or less in funding.
- People who prefer a fixed interest rate.
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