The Wealth Elevator Podcast: Real Estate, Taxes, Investing · Lane Kawaoka, PE

2026 Mortgage Rate Update: What’s Happening with Rates, Treasuries, DSCR Loans, and Investor Lending (with Jen Hernandez)

·32 min·2 clips

DSCR loans can use rental income instead of tax returns, but they often carry a two- or three-year prepayment penalty.

1. The Wealth Elevator Podcast episode centers on 2026 mortgage rates, Treasury yields, and investor lending for residential property. 2. Jen Hernandez appears as a mortgage expert, and Lane frames her as someone who can explain current loan terms after 2020 and 2021. 3. The episode asks what investors should do now if they want a refinance, a rental purchase, or a better view of rate direction. 4. Jen says 2021 was "a complete blur," and she contrasts that with 2022, when rates "nearly doubled within a couple of weeks." 5. She says 2026 rates have been hovering in the low sixes for about six months, with lower rates available if buyers pay points. 6. Jen says Fannie, Freddie, and Chase forecasts point to a flat year, with a possible move into the high fives and no expected "ginormous drops." 7. She explains that the seven-year and 10-year Treasury are the best gauges for mortgage-rate movement because the average mortgage lasts about six to eight years. 8. Lane mentions using the Chatham financial curve and the CME FedWatch tool for commercial modeling and asks how those indicators compare to residential pricing. 9. Jen says she relies on an internal mortgage subscription and Barry Habib, plus YouTube sources like Clear Value Tax, for daily market context. 10. She explains that the Fed funds rate is the overnight lending rate for big banks, while the Treasury market reflects whether investors are buying bonds or moving into stocks. 11. Jen says mortgage rates can rise after a Fed cut because the bond market reacts to broader news, not just the headline policy move. 12. She says Houston has seen some price suppression and seller negotiation, which can create room for closing costs and rate buydowns. 13. Jen says buyers should consider whether a property cash flows and whether the local market is near a floor before values rise again. 14. She says DSCR loans use average rental income in the area instead of full tax-return documentation. 15. Jen says DSCR loans can be slightly better on rate than conventional loans, but the buyer may face a two- or three-year prepayment penalty. 16. She says conventional loans can win on cost when borrowers fully document income and can compare side by side at 25% down. 17. Jen explains that investor loans usually require three to six months of reserves, measured in PITIA and across all properties with mortgages. 18. She says mortgage credit scores are not the same as Credit Karma or bank-app scores because lenders use one of more than 30 FICO algorithms. 19. The episode has a conversational interview style with Lane pushing for practical examples and Jen answering in plain language. 20. Real-estate investors comparing conventional loans, DSCR loans, and reserve rules will get the most value; casual listeners looking for macro rate talk only may skip.

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