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Discover Home Loans is a wholly owned subsidiary of Discover Financial Services. Discover Home Loans offer fixed-rate and variable mortgage loans for purchase and refinance. Discover Home Loans started originating mortgages in 2012. SuperMoney.com is an independent, advertising-supported service.
The company doesn’t offer rate lock extensions or float-down options. If you don’t complete your application within 25 days, Discover will close it. If you resume the process later, you’ll get the best available rate at that time. The minimum credit score requirement for Discover Home Loans is 620, but there are additional criteria you must also meet to be approved for a loan. To get Discover’s best available rate, you’ll need excellent credit, but your CLTV and loan amount will also factor into your rate.
Why take a mortgage refinance loan from Discover
Learning how to refinance your home can help you pay off your mortgage sooner and even access extra cash through your equity. Discover requires a 620 credit score and a debt-to-income ratio less than 43% to qualify for a refinance or home equity loan. The property securing the loan must be a single-family home, condo, town home or planned unit development; investment properties, manufactured homes and properties over 20 acres are not eligible. You'll need a 620 credit score (700 if you want to borrow more than $150,000) and a debt-to-income ratio under 43%.
You can apply online or call a banker to apply for a home loan. Discover says it offers low, fixed APRs and has extended repayment terms up to 30 years. The only mortgage-related products Discover offers are mortgage refinance and its home equity loan. With the home equity loan, you can borrow between $35,000 and $300,000, and repayment terms are 10, 15, 20 and 30 years. How much you can borrow, though, depends on your credit score and how much equity you have in your home. Discover offers fixed-rate home equity loans, which may be used to tap into a home’s equity as a second lien mortgage or refinance a primary mortgage.
Discover Home Loans offers two great ways
There would also be certain mortgage services you might shop for to look for lower fees, like title insurance for example. You can skip that legwork with Discover Home Loans—but remember you’re paying a higher rate. Speaking of home equity, you can also tap into those funds and put them towards other expenses, like home renovations. This is done through a process called cash-out refinancing. With a cash-out refinance, you rework your existing mortgage and pull out a lump sum of your equity at the same time. You then pay that new loan back in monthly installments, just like with your original mortgage.
The loan-to-value ratio is 80% to 90%, depending on your loan amount and credit score. You may not borrow from Discover against a manufactured home. The minimum loan amount for a second-lien loan is $80,000.
Home equity loan options
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The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. As a major national lender, Discover offers very competitive mortgage interest rates. Discover's mortgage rates trend lower than the national average. For example, if you earn a salary of $60,000 per year, your monthly gross income is $5,000. To qualify for a Discover Home Loan, your total debt payments cannot exceed $2,150 per month. Discover offers technology that makes it easy to navigate the mortgage application process online.
Origination Fees
Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Whichever type of mortgage you apply for, you can expect to be approved or declined within 6–8 weeks of submitting your application—perhaps as little as four weeks in a best-case scenario.
Discover Home Loans is a great choice for refinancing because you can get a loan with zero cash at closing. Closing costs are often thousands of dollars, so this is a significant advantage. If you need to borrow more, you will have to look elsewhere. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Indeed, its home equity loan business achieved a milestone in 2019 when its funded dollars for these products reached $1 billion. That represented extraordinary annual growth in its home equity loans over the previous three years of 80% or more.
When it comes to closing a loan online, “in areas where virtual closings are legal, Discover may be able to arrange such a closing for you,” said a spokesperson for Discover. “The lowest APRs are available to borrowers requesting at least $80,000 for second liens or $200,001 for first liens,” according to Nicole Straub, senior vice president of Discover Home Loans. If you want another loan type, such as a USDA loan or jumbo loan—or if you want to buy a home, for that matter—you’ll have to go through another lender. To find out more about how we make money and our editorial process, click here. To find out more about how we make money and our editorial process,click here.
Discover Home Loans is available to borrowers in all U.S. states except Iowa and Maryland.
Before joining CNET Money, Wojno was Senior Editor of Finance for ZDNet, writing on blockchain, cryptocurrency, financial services, investing and taxes. Outside the digital world, Marc can be found spinning vinyl, threading reel-to-reel tapes, shooting film with his Bolex and hosting an occasional pub quiz. † To check the rates and terms you qualify for, one or more soft credit pulls will be done by SuperMoney, and/or SuperMoney's lending partners, that will not affect your credit score. See if you qualify for student loan refinancing and compare real time offers.
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