Mar 9, 2024 - News

How DMV divorcees are keeping their 3% mortgage

Illustration of a golden percentage symbol, but the 0's are broken wedding rings.

Illustration: Maura Losch/Axios

Mortgage rates are making dividing marital assets even more complicated for Beltway divorcees.

Why it matters: It's not just the ex causing heartbreak — homeowners around the country are loath to part with their low mortgage rate.

Zoom in: Many D.C.-area couples getting divorced are selling the house, certified divorce financial analyst Dianne Nolin tells Axios. The Tyson's Corner-based analyst specializes in high-net-worth families and divorcees.

  • Mortgage rates make the monthly payments unaffordable for one person, and tapping into equity to buy the other spouse out of their share isn't cheap either.

If one spouse does really want to hang onto the house — and the mortgage rate — Nolin says there are options.

  • In some instances, both spouses are keeping their names on the mortgage with the intention to refinance years from now.
  • If there are kids staying in the house, the divorcing couple may agree (in writing) to refinance once the last kid flies the coup, for example.

The big picture: Some couples who split up are continuing to live together until mortgage rates fall, even if it means moving into the basement, MarketWatch reports.

Data: U.S. Census; Chart: Erin Davis/Axios Visuals
Data: U.S. Census; Chart: Erin Davis/Axios Visuals

Between the lines: District couples are committed. In 2022, D.C. saw 2.6 divorces per 1,000 residents, compared with 6.9 nationally, according to the latest census figures.

State of play: Local couples choosing to divorce might be doing it later in life. Some analysis suggests adults 65 and older are actually experiencing an increasing divorce rate.

What's next: Some couples are turning to mortgage assumptions, a rare but growing way to take over an existing home loan.

  • Platforms like Roam and AssumeList aim to expand as homebuyers look for ways to snag a loan with a lower mortgage rate.
  • Shoppers in areas where a high share of homeowners hold government-backed mortgages are more likely to see listings that offer a loan assumption, says Realtor.com analyst Hannah Jones, who notes most conventional mortgages aren't assumable.
  • Roughly 1% of DMV listings of homes for sale mentioned assumable loans, among the highest shares in the country, according to a new report.

What we're watching: Mortgage debt isn't the only divorce headache. More U.S. adults want to protect their assets before they tie the knot by signing prenups, Axios' Carly Mallenbaum reports.

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