Are DSCR rates down due to fed lowering rates? What rates are people seeing?

Question

I have several properties that I would like to refi to lower rates.  I could take money out, but I would probally just do a streamline refi.

Is this the right time to make the changes or should I wait for the goverment to reopen and the Fed to meet again?

How many more rate cuts will we get?  When?

What rates are people seeing in the market?

Cash out REfI?

Streamline REFI?

Chris Seveney · Answer

Apples and oranges. Federal funds rate are not directly correlated to interest rates for mortgages. Interest rate rates follow more of the 10 year treasury in the bond market.

Mike Grudzien · Answer

"How many more rate cuts will we get?  When?"If I knew this, I'd be the guru of Wall Street....

AJ Exner · Answer

I just don't see anything big and drastic that I think a lot of investors are thinking.

What I have seen from this administration, at least when it comes to rates, is more of a steady and slow burn while avoiding any kind of big increase (as you can see from YTD on 5Y).

If you look at the 10- and 5- year treasuries (that most lenders tie themselves to) it has just been a slow and steady decrease of the last year that I think we can continue to keep an eye on.

However, there are so many factors that pay a role in that and a continual drop is not guaranteed. For my personal refis, I took the sure bet and went ahead an pulled the trigger and got mine at 6.25%. For my clients, I'm seeing that ballpark, sniffing the high 5s, and to counter anything too high on the rate I'm suggesting targeting 70% leverage or less. If you are just looking to refinance something like you suggested (streamline, rate/term, etc.) then you should be in that ballpark which would hopefully put you in a good place.

You will always see better rates 'streamline' then you would as a cash-out and now is as good a time as there has been in the last ~3 years.

Would love to connect and see if we can help

Good luck!

Doug Clark · Answer

Rates have eased a bit since the Fed started cutting, but DSCR loans don’t move in lockstep with Fed decisions — they’re tied more to bond yields and investor risk appetite. Right now, most investors are seeing DSCR refi rates around 6–8%, depending on credit, LTV, and cash flow. The lowest I've seen now is 5.7% on a Super Prime DSCR.

If your current rate is much higher, a streamline refi could make sense now to lock in savings and improve cash flow. Waiting for “the next cut” might not move the needle much  and there’s no guarantee rates drop further anytime soon.

A cash-out refi only makes sense if you’ve got a solid use for the funds (like buying another property or upgrades). Otherwise, keeping leverage low with a streamline refi is usually smarter right now.

Bottom line: refinance for better cash flow, not to chase the perfect timing, that’s almost impossible to predict.

Ernie Rodriguez · Answer

I locked someone in at 6.35% with 2 points last week. 30YR DSCR refi, 2 year prepayment penalty

Miami, FL

Lesley Resnick · Answer

Who did you use?

How much did they make you suffer to get the loan closed?  lol

Vaughn Croxton · Answer

Great questions! — a lot of people are wondering the same thing right now.

At the moment, rates have come down a bit from last year’s highs, but they’re still moving week to week based on inflation data and Fed comments. The Fed doesn’t directly set mortgage rates, but their decisions (and the market’s expectations of them) heavily influence them. Most forecasts are pointing to gradual, modest cuts over the next few quarters, not a rapid drop.

If your current rate is significantly higher, a streamline refinance could still make sense now — especially if it doesn’t involve a full re-underwrite or appraisal. You could always refinance again later if rates drop further, since streamlines tend to have lower costs.

For cash-out refis, lenders are still pricing those higher than rate-and-term loans, and guidelines can be a bit tighter. It’s worth comparing both options based on your goals — whether you’re mainly trying to reduce payment or tap equity for another investment.

Big picture: no one can perfectly time rate movements. If the numbers make sense today (payment savings, break-even timeline, etc.), it’s usually better to act on that rather than wait on “the next” Fed meeting.

What rates are you seeing on your quotes so far? It might help to compare structure — streamline vs. full doc vs. cash-out.

– Ridge Lending Group (Licensed in 49 states, excluding NY)

Henry Clark · Answer

OP.  My considerations would be 1.  Spread between current loan rate versus refi rate?, Then refi cost.  2.  Loan period remaining.  If you’re at 15 years and would refi to 25 or 30.  I think the USD will continue to devalue.  This your debt will get cheaper in future years.  3.   Unless you had a next project, just go with the monthly cash flow versus cash out.

For readers who are buying a new property.  I would buy now at say 6.7% versus waiting for 5.7%.   The 6.7% can be refid for say $1,500 versus if you wait till rates go to 1% point lower, unit cost might rise $20,000 with more competition.  You control the refi, but you don’t control the unit price.

Jesse Cone · Answer

Hey Lesley! I have been doing a lot of DSCR loans as of lately. Let's connect and maybe I can help you get that done for your properties.

Joseph Bui · Answer

I locked a client at 6.875% in Seattle with no points this week. Let me know if you want a quote.

Are DSCR rates down due to fed lowering rates? What rates are people seeing?

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