{"id":183408,"date":"2025-06-20T10:54:44","date_gmt":"2025-06-20T16:54:44","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=183408"},"modified":"2025-07-30T11:22:33","modified_gmt":"2025-07-30T17:22:33","slug":"should-you-refinance-with-dscr-loans","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/should-you-refinance-with-dscr-loans","title":{"rendered":"I Thought Refinancing Was Dead\u2014Until I Ran the Numbers"},"content":{"rendered":"\n

This article is presented by Dominion Financial Services<\/a><\/span><\/em><\/p>\n\n\n\n

If you’re holding a single-family rental right now, you\u2019ve probably asked the same question I did: Is it even worth <\/span>refinancing<\/span><\/a> with rates this high?<\/span><\/p>\n\n\n\n

On the surface<\/span>, the answer seems obvious. Interest rates <\/span>are still floating<\/span> near 7%. Everyone\u2019s waiting for the Federal Reserve to cut rates. <\/span>If you are like most real estate investors, <\/span>though<\/span>, waiting <\/span>sometimes<\/span> can mean missing the opportunity right in front of you.<\/span><\/p>\n\n\n\n

But here\u2019s what most investors miss: Refinancing isn\u2019t about rate timing, it\u2019s about capital strategy. <\/span>And<\/span> in some cases, refinancing with a <\/span>DSCR loan<\/span><\/a> today could actually help you scale faster, grow smarter, and position yourself ahead of the next wave of opportunity.<\/span><\/p>\n\n\n\n

What\u2019s Happening With Interest Rates?<\/span><\/h2>\n\n\n\n

The Fed held off on cuts again, and mortgage rates remain sticky. But that doesn\u2019t mean they\u2019re going up dramatically, either. Most projections indicate slow, gradual declines over the next 12 to 18 months. <\/span><\/p>\n\n\n\n

Translation? <\/span>Rates might drop a bit, but <\/span>probably<\/span> not <\/span>fast<\/span> enough to <\/span>change<\/span> your <\/span>whole<\/span> investing life.<\/span><\/p>\n\n\n\n

More importantly, DSCR loans don\u2019t move exactly in lockstep with conventional mortgage rates. <\/span>They’re tied<\/span> to investor appetite and risk tolerance, which means there\u2019s often a gap between what the headlines say and what lenders like Dominion Financial Services are offering today.<\/span><\/p>\n\n\n\n

S<\/span>o\u2026W<\/span>hen Do DSCR Rates Drop?<\/span><\/h2>\n\n\n\n

The honest answer? We don\u2019t know. And even if they do, it might not happen in time to fund your next deal. Some investors wait for the “perfect” rate and end up missing out on five great ones. Others lock in what works now, create <\/span>cash flow<\/span><\/a>, and refi again when the market shifts.<\/span><\/p>\n\n\n\n

Here\u2019s the upside: Many DSCR lenders allow future refinancing with minimal penalty, and some even offer streamlined options if rates improve. That means you can refinance now to unlock equity or exit a high-interest bridge loan, then <\/span>refi<\/span> again later if rates drop further. <\/span><\/p>\n\n\n\n

Ensure you fully understand the terms of your loan before committing to it, as DSCR loans often have a range of prepayment penalties that impact the interest rate and monthly payment. <\/span><\/p>\n\n\n\n

Should You Refinance Now or Wait?<\/span><\/h2>\n\n\n\n

It depends on your goals. <\/span>If you’re <\/span>just<\/span> trying to shave off 1% to lower your monthly payment, it might make sense to wait.<\/span> But<\/span> if you’re trying to access trapped <\/span>equity<\/span><\/a>, consolidate debt, or convert a short-term loan into a long-term <\/span>hold<\/span>, refinancing now could be the better <\/span>play<\/span>.<\/span><\/p>\n\n\n\n

A DSCR refinance can:<\/span><\/p>\n\n\n\n