Discover Home Loans Review

June 12, 2012 87 Comments »
Discover Home Loans Review

Well, it’s official, there’s a new major mortgage player in town.

And they go by a familiar name, “Discover Home Loans.”

You may have heard a while back that the credit card issuer was getting into the mortgage game, and now their operations are officially live.

In case your were wondering, they scratched and clawed their way into the mortgage biz by acquiring the loan origination assets of Tree.com, formerly known as Lending Tree.

What Does Discover Home Loans Offer?

They offer mortgages. But seriously, they offer both fixed-rate and adjustable-rate conventional mortgages, along with FHA loans.

And they can be used for either a purchase or a refinance, including both rate and term and cash-out refinances.

In the fixed-rate department, you can apply for anything from a 10-year fixed to a 30-year fixed, with 15- and 20-year fixed options in between.

For ARMs, your options are limited to terms of three, five, and seven years. The popular 10-year ARM is notably absent.

With regard to FHA loans, they offer a 15-year and 30-year mortgage term, and an adjustable-rate option. So nothing too groundbreaking here, just basic mortgage offerings.

It’s unclear if they will offer jumbo loans in the future.

What Makes Discover Unique?

Well, they claim to have a streamlined application process, meaning it should be easy to apply and get approved for your mortgage.

You can start the process online by putting in some basic information, and then a Discover “mortgage banker” will call you back. That same mortgage banker will be with you from start to finish.

Additionally, they allow you to securely upload documents and check the status of your loan 24/7, via their home loan lending website.

With regard to time, they offer a “Close on time guarantee” that promises they’ll get your loan funded as scheduled or give you a credit of up to $1,000 for closing costs.

And when you use them for a subsequent purchase or refinance, they will give you a “Welcome back bonus” credit of up to $2,000 that can be used toward closing costs.

New: They’re also offering a 5% cash back bonus to Discover cardmembers who put the appraisal deposit on their card, now through April 16, 2013.

How Are the Rates?

The all-important question…and really the only one most people care about, their mortgage rates.

I took a look at their rates online, and they’re currently advertising a 30-year fixed for 3.75%.

But you have to pay 1.375 in mortgage points. Additionally, the mortgage must be pure vanilla.

In other words, it has to be an owner-occupied, single family home, and the borrower must have a Fico score of 720 or higher.

Additionally, Discover appears to be advertising rates for loan-to-value ratios of 70%, which is not the standard 20% down, or 80% LTV.

So you’ve got to have a pretty pristine loan scenario to snag their advertised rates, which seem a tad high, especially with mortgage points being paid.

[Watch out for mortgage rates you have to pay for.]

Where Does Discover Home Loans Do Business?

Currently, they appear to offer mortgages in 48 states, along with the District of Columbia. New York and Utah are absent from the list.

It’s unclear if these states will be added later as operations presumably expand, but if so, it will be noted here.

Perhaps it’s part of a soft roll-out to ensure everything works out as planned before getting into all 50 states. Or maybe it’s just a simple (or complex) licensing issue.

If you happen to reside in one of the states mentioned above, and want more information regarding Discover’s mortgage lending program, call them up at 1-888-866-1212.

It’ll be interesting to see how Discover navigates the mortgage market. They certainly have a ton of existing customer relationships to tap into, so they’ll be able to grow quickly, and perhaps make the mortgage market more competitive.

Though my guess is that they’ll offer slightly higher-than-market mortgage rates to existing credit card customers, and bank on their trust and reliability to get it all done.

They aren’t going to change the mortgage world as we know it.


87 Comments

  1. Jim Howley January 19, 2017 at 3:04 pm -

    This is the worst experience I have ever had with a banking institution. I was pre-qualified on October 24th and told that the equity loan would close in about 45 days. I am now approaching 90 days and was told it would be approved this week according to the “team lead” Felicia Camfield but now the processor who doesn’t respond to any of my communication, Sheila Hawkins, tells me that is isn’t even through the quality check and due to their time line the mortgage statement is outdated as is the title search. They need to pull another title and that will take at least another week before it even goes to underwriting. There is something very fishy about this company. I was approved, had significant income, was told over and over it would be finished within a week or two and now it hasn’t even gone to underwriting. Either Sheila Hawkins is an incompetent or her boss is a liar. Either way, they should both be fired.

  2. Susan Yellen November 1, 2016 at 5:16 pm -

    Worst loan experience. After nearly 3 months, I still had not been given a closing date. They repeatedly asked for the same information I had already given. Their customer service is virtually non-existent. Only when I asked if they were legitimate or that wanted to cancel did I receive any sort of response.

  3. Colin Robertson October 6, 2015 at 8:36 am -

    Betzy,

    They’re closing up shop anyway so it shouldn’t be an issue going forward.

  4. betzy October 5, 2015 at 1:17 pm -

    STAY AWAY DON’T do it!!!!!! Discover loans pulls you in with their mailer but when you apply your rate is not what is advertised and they fail to understand your situation. If they really would have been honest with me, i would have avoided taken the loan. Then next business day i wanted to cancel and they refused!!!!

  5. EG March 26, 2015 at 12:18 pm -

    AVOID AVOID AVOID AVOID! Another victim here.

  6. Kathy Gill March 23, 2015 at 6:48 am -

    Run from these people! They don’t have a clue what they are doing. We have excellent credit, and gave them every piece of information they asked for within 24 hours. 3 months later, they begin asking ridiculous questions about our taxes, which proved they have no idea what they are doing. They treated us like we were the problem, when in fact, the problem is, they lost paperwork and cannot comprehend a complicated tax return. What a waste of my time!!!

  7. gtn February 10, 2015 at 5:01 pm -

    do not use discover….I learned the hard way :(

  8. giao February 10, 2015 at 4:49 pm -

    :( DO NOT USE DISCOVER!!! I’m pretty sure it’s a scam. How else to explain the 3 plus months of headache and broken promises? It would at least make sense …and they still have my $400 appraisal deposit :(

    After 3 months and being ‘so close to closing’ I’m ready to cancel.

    Examples of discover’s crap.
    1) first guy was rude. I called back and asked to work with someone else…I’m fair and give companies a chance even if they have one A-hole.

    2) guy #2 sales manager Paul Morris, apologizes, tells me some stuff about the great service I’m gonna get. sends me to ‘mortgage banker’ Mack Davidson who is a former car valet and band manager (thanks to linkedin). (nothing against car valets but this is my money you’re dealing with). His pitch ‘this is a great company, everything is in-house and streamlined, your refi will close in less than the time we told you, no problem. I can just walk over to a colleague and take care of anything quickly.”

    3) They keep losing my paperwork. I used their ‘MY STATUS’ website and got confirmation of receipt every time. I would also call and email to confirm they had all paperwork as soon as anything was requested. Weeks later they would say, ‘only a couple more documents we need from you’ and it would be the EXACT SAME documents I sent before that they said they got. Where are you putting all my ‘secure sensitive info’ with my ssn on it????? why are you losing it if it is in your computer system? Stacy chadwell (my account manager) gives me some insight. she states that the company accepted so many applications for loans and refi that they are busier than expected. This is about 2 months into the process (should’ve closed at 40 days). Mack denies this and states that my situation is so complicated it confused the paperwork…My mailing address is different than my primary residence. I had sent them a letter stating that, I told Mack that multiple times. He said it shouldn’t be a problem. They are saying this is why they are 3 months late in closing, all my fault apparently.

    4) I get an email from the first guy I talked to when I called discover initally. It is regarding the account of another person with the same last name. OMG! really?? that is unacceptable.

    5)at 3 months…”your loan will close tomorrow, set up a place to meet the NOTARY!!” yay….later that day…
    SORRY WE LIED. the other dept went home early, not ready to close. We’ll call you next week. After I already pulled in a favor from a colleague to cover me at work and looked up a starbucks location to meet the notary and went to get a cashier’s check :(

    6) at first they said no on-site appraisal needed. just online comps. next thing I know 3 months later they suddenly need an on-site appraisal. I have to take time off to meet the lady immediately. she calls me day-of meeting and forgot she even set up the meeting with me over the phone the day before and tries to re-set the time. luckily we found a time that worked for both of us.

    7) Mack says I’m to get my $400 appraisal deposit refunded on my card in 3-5 days. it’s been 8 days so far.

    8) Mack’s supervisor (paul morrison) has no idea what’s going on.

  9. Larry Li January 19, 2015 at 4:57 pm -

    My experience with Discover was very disappointing to the best. in 2013 I was applying for a mortgage for an investment property and Tony Grandolfo was (the loan originator) and his supervisor never delivered the promise they gave me at beginning despite of my over 780 credit score and complete set of documents they required. it dragged on for over two months. in the end, the time ran out for closing and I had to seek financing elsewhere. two months ago, i applied for refinancing for my own residential property with Discover and the same guy Tony handled my. I ended up with same promise, same saga. two months later, the loan was declined. I will never use discover again.

  10. Marianne Daily January 17, 2015 at 12:11 pm -

    Raymond, I am wondering if the interest rate given on your good faith estimate held true for your closing. Thanks!

  11. Raymond Schultz January 3, 2015 at 9:59 pm -

    I had a great experience with Dennis Brown and Discover Home Loans. For 4 years I have been trying to refinance my house and have dealt with multiple banks and mortgage brokers which led to alot of dead ends and frustration. Dennis Brown did not rush the process and after waiting 2 months the refi went through without any difficutly. A breathe of fresh air in the corrupt and putrid banking industry. I have sent multiple people to this gentleman and he has helped them all. Thank you Dennis Brown and Discover Home loans. 15 year fixed 3.375% down from 30 year 5.875% and I am singing and dancing.

  12. Gagandeep October 9, 2014 at 1:17 pm -

    Hi everyone I would like give u some very important information about discover home loan

    Date 10/9/2014. Time 12.58pm

    Last 2 day I was talking on the phone with discover home loan agent regarding my home refinance they lady she promise me she ll give me the 3.75% for 20 year fixed and she took my application she run my credit and today she said she need good faith estimate from ur current lender I said what the hack now ur saying u need good faith estimate after u done everything.now she said she can offer me 3.89% I want to inform u all guy who is planing to refinance home with discover home loan pls don’t go with discover home loan They r lier they jus wanna collect the information.
    don’t believe agent word until they r not giving u any written. 1st time in my life very bad experience with this lender.
    Aging I wanna let u kno pls think b4 u wanna go with discover home loan.

    Now m working prospect finance group they r awesome guy b4 run ur credit they ll give good faint estimate
    They r offering awesome deal 3.65% 20 year fixed rate and no closing cost And amour which is current lender offer pay off quate.

    Thx all dear who’s reading my review. If u have any question email me.

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