How Seattle divorcees might keep their 3% mortgage rates
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Divorcing Seattleites may need to get creative to avoid the financial blow of having to get new mortgages near 7%.
Why it matters: Sometimes it's not only the ex causing heartbreak but the loss of a low mortgage rate that homeowners in Seattle and around the country are loath to part with.
State of play: Some couples who split up are continuing to live together until mortgage rates fall, even if it means one of them has to move into the basement, MarketWatch reports.
How it works: It's possible for both partners to stay on the mortgage for a set number of years even after divorce, says Alex Jacobson, founder of a Chicago divorce mediation group.
- Then, either they sell the home or the person who's keeping the house refinances to get the loan in their name, Jacobson tells Axios.
Between the lines: For many who are recently divorced, refinancing the house or buying a new one could send their monthly mortgage payment soaring, according to the Divorce Lending Association.
- Tapping into equity to buy the other spouse out of their share isn't cheap, either.
Zoom in: Washington's divorce rate in 2022 was a 6.8 per 1,000 residents, according to census data.
What's next: Others are turning to mortgage assumptions, a rare but growing way to take over an existing home loan.
- Startups like Roam and AssumeList aim to expand as homebuyers look for ways to snag a mortgage with a lower rate.
- Shoppers in areas where a high share of homeowners hold government-backed mortgages are more likely to see listings that offer an assumption, says Realtor.com analyst Hannah Jones, who notes most conventional mortgages aren't assumable.