“Don’t Wait for the Fed”: Why the Cut Is Largely Priced In—and How to Lock a Win Now

Markets expect the Fed to cut this week. But here’s the thing most headlines skip: mortgage/DSCR rates often move before the meeting because traders price in policy changes via futures and Treasury yields. Translation—much of the cut is already baked in. Waiting for the press conference rarely unlocks a brand-new discount, and the next data print could send yields higher again. CME Group+2Investopedia+2

Why a Fed cut ≠ automatic cheaper DSCR tomorrow

  • Markets front-run the Fed. Fed-funds futures and the CME FedWatch tool show probabilities in advance; lenders adjust pricing as expectations shift—not just at the announcement. CME Group

  • DSCR pricing tracks longer yields/MBS, not the Fed directly. Mortgage/real-estate rates tend to follow the 10-year Treasury more than the overnight rate, so they can drift up even when the Fed cuts—especially if inflation or supply shocks nudge yields higher. CBS News+2Kiplinger+2

Near-term risks to waiting

  • Hot CPI / jobs surprise can pop long yields (and lender rate sheets) in a day. Markets have already rallied on disinflation; upside surprises move rates fast. MarketWatch+1

  • Macro/fiscal swings (deficit, term premium) can re-steepen yields regardless of the Fed’s cut path. The Budget Lab at Yale

What to do now (smart, no-regret moves)

  1. Price your refi at today’s sheet (our DSCR rates start at 5.75%) and set a rate-lock plan. (We’ll advise based on your file.) CBS News

  2. Consider a permanent buydown if you plan to hold beyond break-even.

    • Example: $350,000 loan, drop 7.50% → 5.75% ≈ $405/mo lower P&I. If points run ~1.25% (≈ $4,375), break-even ≈ 11 months—after that, it’s pure monthly savings and stronger DSCR. (Illustrative only.)

  3. Roll eligible costs into the refi or cash-out refi so you’re not writing a big check at closing (subject to LTV/DSCR and program rules).

  4. Model both paths—“take it now” vs. “wait a month”—with stress tests (+25–50 bps on rates). If the deal still works now and breaks if rates back up, don’t wait.

DSCR program highlights (1–8 units)

  • Rates start at 5.75%; Min DSCR 1.00 (1.15+ recommended for best pricing)

  • Min FICO 660 (680+ recommended)

  • Max LTV: 80% SFR, 75% for 2–8 units, 65% Foreign National

  • 30-yr fixed, 5/7 ARM, up to 10 yrs Interest-Only

  • Min loan: $100k (guideline: ~$100k/unit for multis)

Quick start: 3 things to send for same-day scenarios

  • Address + current/market rents, taxes/ins/HOA

  • Target LTV (rate/term or cash-out) + FICO band

  • Hold period (we’ll calculate buydown break-even and lock strategy)

We’ll return side-by-side at today’s 5.75% starting rate, with/without buydown, plus a rolled-in-cost option—so you can lock a lower payment before the market moves.

Disclaimer: Not a commitment to lend. Rates, terms, and guidelines subject to change and approval. Mortgage/DSCR rates are influenced by market yields and may change intraday.