Discover Financial Enhances Home Loan Biz - Analyst Blog

Although Discover Financial Services DFS has significantly enhanced its line of services in recent times, shares of the company have remained mostly constant. Discover Financial Services, apart from being a popular card issuer, provides home loans through its subsidiary Discover Home Loans. This subsidiary has recently added a "home search" tool to its existing services, offering prospective home buyers the ease of gathering information regarding homes, real estate agents, as well as the financial aspects at one-stop.

What the Product's About

This new Multiple Listing Service search tool has been provided by Cartus Corporation, a real estate broker in the U.S. The specialty of this tool lies in its easy to navigate features, the availability of an up-to-date data of homes that are for sale in the U.S. and also a list of elements considered while purchasing a home, like nearby schools, neighborhoods etc.

Moreover, the tool will provide navigators with an access to Discover Financial's online calculators, aimed at helping customers estimate their capacity to purchase a home based on the available financing options. Along with the online facility, homebuyers will have the option to consult a real estate professional through the Real Estate Rewards program. In fact after completion of a transaction, homebuyers might receive rewards ranging from $200 to $3100.  

How It Helps Discover Financial

Discover Financial's home loan subsidiary has been working hard towards simplifying the home buying experience for quite some time. For this the company incorporated usage of modern technologies and online tools to enhance the home buying procedure.

As more customers navigate the site and show interest in buying homes, they will resort to home loans provided by Discover Financial to fund their transactions. This will help Discover Financial to generate growth in its home loan business.

Moreover, previously home buyers relied largely on traditional information sources like newspapers and real estate magazines to conduct their home search. But now, with the advancement of technology, online real estate research web sites have gained popularity.

As per a report by National Association of Realtors, 74% of home buyers prefer using the internet for searching homes. At this juncture, the roll-out of the online home search tool by Discover Financial reflects the company's intentions to tap the market opportunity and emerge as one of the leaders in the space.

Zacks Rank

Discover Financial carries a Zacks Rank #3 (Hold). However, other better-ranked stocks in the financial services industry include Capital One Financial Corp. COF, Tree.Com, Inc. TREE and World Acceptance Corp. WRLD. All three stocks carry a Zacks Rank #2 (Buy).