Discover Home Equity Loan Review 2024

Unlike a home equity line of credit, which is essentially a revolving line of credit, a home equity loan makes a specific amount of money available in one lump sum. Most have fixed interest rates and borrowers make regular monthly payments over a predetermined period.

You can use the money for any purpose, whether it’s funding home repairs, covering emergency medical bills or paying down a higher-interest debt, like a credit card bill.

• APR: Fixed-rate options from 7.99% to 12.86% (as of July 2024)
• Repayment terms: 10, 15, 20 or 30 years
• Loan minimum and maximum: $35,000 to $300,000
• Closing timeline: Six to eight weeks

The Better Business Bureau gave Discover an A+ rating, its top grade, based on company behavior, including transparency, truthful advertising and how it responds to consumer complaints.

Pros

• Accepts combined loan-to-value ratio of up to 90%
• No lender fees or closing costs
• Mortgage refinancing available
• Available in most states

Cons

• No purchase mortgages or home equity lines of credit
• Must apply online or via phone
• $35,000 minimum loan amount is higher than most
• $300,000 maximum loan amount is lower than most

You’ll need to provide personal details — including your name, address, birth date, employment status and income — and information about your home, like the type of property, estimated value and your current mortgage balance.

To get a customized quote, you’ll have to upload identification, mortgage statements, W2s and your homeowner’s insurance policy. You may have to send additional paperwork through the mail.

According to Discover, the process from quote to closing day usually takes six to eight weeks. Some lenders promise a faster closing, but the timeline for any home loan depends on various factors, including the amount you’re borrowing, your credit history and how quickly you can schedule an appraisal.

Plus, Discover lends in all but two states and has both easily accessible loan representatives and a history of superior customer service.

If you’re looking to borrow a lot, though, you may need to explore other options: Discover maxes out at $300,000 on home equity loans, while other lenders will go up to $500,000 or even higher.

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