Discover home equity review March 2021 |
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Discover Home Equity review

Last updated:’s rating: 2.2 / 5.0


Choose a payment term that suits you and pay $0 at closing with this online-only lender.

If you need $200,000 or less in funding, Discover offers home equity loans in a range of repayment terms — and charges nothing in closing costs. Though it’s a national bank, its loans aren’t available in Iowa, Maryland and Texas.


Loan products offeredHome Equity
Minimum credit score620 for equity loans
State availabilityNot available in: IA, MD, TX

What types of fees does Discover charge?

Discover waives the typical application, valuation and origination fees. It covers the closing costs so it’s unnecessary for you to bring cash to the table.

What makes Discover unique?

Discover has a few distinct offerings.

Flexible repayment terms

The lender has 10-, 12-, 15-, 20- and 30-year home equity loans, while many competitors cap their terms at 15 years. As an online bank, it can afford to offer rates that start at an aggressive 4.99% — well below the national average.

No closing costs

Discover doesn’t charge application, valuation or origination fees, or ask for cash on closing, making it a cost-effective option for many borrowers. Closing costs typically run between 2% and 5% of the loan amount, so this can translate to thousands of dollars in savings.

Personal banker

One of Discover‘s major selling points is that every applicant has the support of a personal banker. Along with answering any questions, your banker takes the time to understand your financial situation and walk you through the application process.

Do I qualify for a loan with Discover?

Discover is upfront about its borrowing requirements. To apply for a home equity loan, you’ll need:
  • A credit score of 620 or higher
  • A maximum debt-to-income ratio of 43%
  • At least 5% equity in your home

You must also be planning on living in the home for at least 36 months after taking out the loan.

The relatively low credit score and high loan-to-value ratio make Discover‘s home equity loans accessible for a wider range of borrowers.

Discover Home Equity reviews and complaints

Discover has been accredited with the Better Business Bureau since 1989, and holds an A+ rating for its services and operation. The BBB has recorded 877 complaints in the last three years, most of which were related to billing, collections and problems with the product or service. Customers gave Discover a 1.5-star rating based on 70 reviews. However, it’s worth pointing out that these reviews and complaints are about Discover Bank as a whole — and they’re about more than its home equity loans division.

Across other consumer forums, customers praise the personalized process, competitive interest rates, and lack of closing costs. Some said the path from application to closing can be as quick as 30 to 45 days, but Discover promises nothing on its website.

What are the benefits of getting a mortgage through Discover?

With Discover, every applicant is assigned to a personal banker. The lender stands out for these reasons, too:

  • Flexible payment terms. Repay your loan in 10, 12, 15 or 20 years.
  • Competitive rates. As an online-only lender, Discover is able to offer fixed rates that are significantly lower than the national average.
  • No closing costs. With Discover, you’ll save on application and origination fees.
  • Lenient lending criteria. Discover will lend 70% to 95% of the home’s value, depending on the borrower’s credit and lien position.
  • Healthy loan range. You can apply for a loan between $35,000 and $200,000.

What to watch out for

Discover offers no real-time help online, which is unusual for an online bank, and you can only reach a banker by phone from Monday to Friday, 8 a.m. to 10 p.m. EST. Its home equity loans have these drawbacks:
  • Mixed application process. While you can begin the application online, it will ultimately be handed over to a banker.
  • Not nationwide. Loans aren’t available in Iowa, Maryland or Texas.
  • Limited to fixed-rate loans. This may turn off borrowers who want a variable rate option. Discover doesn’t offer HELOCs, either.

Compare home equity lenders

Compare top brands by home loan type, state availability and credit score. Select See rates to provide the lender with basic property and financial details for personalized rates.
Name Product Loan products offered State availability Min. credit score
Axos Bank
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Hometap equity partners
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Only available in: AZ, CA, FL, MA, MD, MI, MN, NC, NJ, NY, OR, VA
Sell a portion of your home's equity for cash without monthly payments or hurting your credit score.

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Need help? Talk to a customer specialist


How do I get started?

You can start your application online by answering a few questions about yourself and the property. Then, you’ll be connected to a banker to complete the process.

Get the ball rolling by following these steps:

  1. Go to the Discover website. On the homepage, click Home Equity Loans.
  2. Press Apply Now.
  3. Enter your loan information:Amount, Loan Purpose (e.g. pay for education or renovate home), Property Type, Property Address, and Property Value. If you don’t know the exact value, an estimate is fine.
  4. Type in your personal, contact and citizenship details. If you have a coapplicant, check the box.
  5. Verify your identity by providing your date of birth, Social Security number and gender.
  6. Consent to Discover‘s request to obtain your credit report.
  7. You’ll receive a confirmation ID, and a banker will contact you about the next steps.

Required documentation

Discover may ask for the following documents:
  • Recent pay stubs
  • Bank statements
  • Retirement and investment account statements
  • Tax returns
  • W-2 forms
  • Driver’s license or government-issued photo ID
  • Current mortgage statement
  • Homeowner’s insurance declarations page
  • Flood insurance information, if your property is in a flood zone
  • Voided check or ACH form, if you’ll be receiving cash out

Self-employed? You can submit a profit and loss and balance sheet statement instead of pay stubs.

I got the home equity loan. Now what?

Monitor your home equity loan with these tips:

Register for an online account. Your welcome letter will outline the steps for setting up an online account. You’ll need your loan number, the ZIP code of the property and the last four digits of your Social Security number. Once the account is set up, you can view statements, manage payments and download tax documents.

Make timely payments. Skirt late fees by choosing a payment method that suits you. These are the options:

  • Online. Sign into your account to pay via a checking or savings account. You can enroll in (and cancel) automatic payments at any time.
  • Phone. Dial 855-295-2193 24/7.
  • Check. Mail a check to this address: Discover Home Equity Loans, PO Box 29029, Phoenix, AZ 85038

Contact customer service. Questions? You can reach the team by:

  • Phone. Call 855-295-2193 from Monday to Friday, 8 a.m. to 10 p.m. ET.
  • Mail. Send snail mail to: Discover Home Equity Loans, 1 Corporate Drive, Suite 360, Lake Zurich, IL 60047

Frequently asked questions

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Expert review

Katia Iervasi

Review by

Katia Iervasi is a staff writer who hails from Australia and now calls New York home. Her writing and analysis has been featured on sites like Forbes, Best Company and Financial Advisor around the world. Armed with a BA in Communication and a journalistic eye for detail, she navigates insurance and finance topics for Finder, so you can splash your cash smartly (and be a pro when the subject pops up at dinner parties).

Expert review

Discover’s home equity loans are best for borrowers who need $200,000 or less in funding and prefer a predictable rate. Though it’s an online bank, you’ll need to hop on the phone with a banker to complete your application.

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