What It's Like To Stay Together For the Kids— and the Mortgage Rate

0:01I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. And it's time for some money rehab.

0:16Would you live with your ex for a 2 % mortgage? That is a very real question that Morgan Dixon and her ex-husband Ryan had to ask themselves. And ultimately, they said yes. Today, I chat with Morgan, who you might have seen in the Wall Street Journal, in a piece that went viral for all the right and, as I find out, a few wrong reasons. The article spotlighted how Morgan is still living with her ex-husband because of a 2 % mortgage rate. Although, as Morgan tells me, there is more to this story, as there always is. But as a side note, two exes living together because of a mortgage rate is my dream rom-com.

0:48Just saying. Anyway, Morgan is a real-life example of the lock-in effect, the phenomenon where homeowners don't sell their properties because current mortgage rates are relatively higher than what they have now. The article that features Morgan and her ex says that between mid-2022 and mid-2024, the lock in effect prevented nearly 2 million home sales. Today, Morgan shares her story. And then we dive deeper into the financial side of marriage, divorce, and everything in between. The interview after this. I recently went on a quick beach trip with my husband for a little couple's time, and it was perfect.

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3:34and applicable terms. Morgan, welcome to Money Rehab. Hi, thank you so much for inviting me. This is so cool. It is so cool to be able to talk to you. I was so taken by your story. And I just love to get right into it because I saw the headline, you and your ex-husband are holding on to your home because of your mortgage rate. How did we get here? Yes. And so for me, that title was a bit deceiving. We were definitely doing this arrangement. Our primary reason is for our kids, you know, the benefit of our children to have us both accessible, so they can see their mom and dad every day. There is obviously this financial gain.

4:17We just, I think, looked around in the neighborhood and prices if I wanted to buy something else, even a few blocks away. It's just so expensive now. And the interest rates are so high. I think the last I checked was 6%. And then I was also looking, I mean, our property value from the time we bought our properties has almost gone up at least 75%. I mean, it's very, our values are increasing. And so in our settlement, Ryan and I agree, everything after we die is going to go to our kids. And so if we can hold on to these properties, for sure, after our time is here in the world, hopefully our kids will have these, you know, very nice properties that will be worth a lot that they can either live in or, you know, cash in or whatever.

5:09So yeah, looking at it and the big picture of what could we afford now, and then also, you know, 50 years from now, or 20, even 20 years, 10 years from now, you know, it makes more sense for us to hold on to these properties. So how could we make our new way of living work like that? How do you make it work? Like, what are the sleeping arrangements? We use a notes, an Apple app every week to kind of decide who gets what night, you know, it's usually three nights with me and four nights with him or vice versa. We'll decide that at the beginning of every week. We try to allocate times where I have the house totally to myself with the kids and then vice versa for Ryan.

5:53A lot of communication and planning. If I sleep in the house, I'm sleeping with the kids. Basically, because I live in the Airstream trailer, or I was, I found out after the article was published that that's illegal. The city code came and I came home with a note on the door saying no living in the Airstream. What? Wait, so they saw that from the article that you were living there? And I love our city. Like we were unaware that that was illegal. And they were just so kind about it. And so since then, I've been sleeping in the house. I do store some things out there just because I'm preparing for a build.

6:34And we're just kind of sorting through stuff. So I'll be kind of in and out throughout the day in the Airstream. But yeah, we don't want you to get a ticket. So whoever's listening, you're not living there. I'm not living there. I've since moved out. The city was just so wonderful. And that's another thing. I mean, we just love this community. You know, we go to the library. I know the librarians. My kids have known the librarians since they're like weeks old. Like, we have nothing but love for where we live. And so when we decided, you know, we're getting divorced, but how is this going to work?

7:03Neither of us wanted to move, you know. Before I met Ryan, I had owned a home in Orlando. And so the very obvious choice would be for me to have moved back to my old house and get my old job or find something there. I mean, it would be very easy for me to find, or I should say, it would be easier for me to find work in Orlando. But then, again, just thinking what's in the best interest of our kids. That's more than an hour drive, one way, if they want to see their dad or their friends. Again, like we have so many friends and so many people we love around us here. It's just it just didn't make sense.

7:42Thinking of their best interest. We wanted to disrupt their lives the least amount of possible. You know, you're doing great. So when you guys were separating, it sounds like there were a few options for living arrangements. It was sell the house. You know, one of you could buy the other out, I presume, or you could share. which is not the most conventional option. Were you guys on the same page with that from day one or did you want to sell or do you want to sell? No, we both surf. We live three blocks from the beach and they touched on this a little bit in the article. I mean, we really invested a lot in our garden, in the house that Ryan now owns.

8:25We've renovated a lot. I mean, a lot of love has gone into this house and then the adjacent property. And so we just did not want to sell. And even if one of us ended up here, I mean, again, to keep the other one in the nearest proximity just did not make financial sense. And I don't want to ever come off like I have all the answers. This is a very much experiment for us. We're taking it one day at a time. We definitely still have our hard moments. Some weeks are much better than others. It is kind of just a lot of communication and being honest with what's working and what's not working. And yeah, so I definitely don't ever want to seem like this is it.

9:11I know how to do it. This is very much like today it's working kind of situation. I'll take it. I mean, I think everybody's still figuring it out, but don't really think of this as a potential option. So are really curious to see how it's actually working with you guys. And I would love to follow the numbers a little bit. So it sort of colors how this all came to be and how this makes sense. When did you guys buy the house and how much was it when you bought it? Yeah, we're married in 2018. So we bought this house in 2017. And we bought it for$2.65, I want to say. And now Zillow is estimating it to be, I don't know.

9:56Let me look it up. Yeah, Zestimate, it's 583. Okay. And then I'm on a different property. And there's a vacant property next to me. And it's just the dirt. There's nothing, no structure there. And that's listed at 440. You guys own that? No. I own the one right next to Ryan, which is the, I don't know if I want to say my address. But I'm directly next to Ryan. And then there's a corner lot next to me. And that corner lot is being listed at 440 something. So my point being that that lot that I'm on is even gone. I mean, it's at least going to be 440 maybe, you know. So you guys did the math and what would it be like to rent something in the area?

10:46Yeah. So because when the city said I couldn't live in the airstream, I was looking for apartments because we just didn't, we didn't know if we could, you know, if I could move back in. And basically the one bedroom studio that I really wanted was 1300 a month. But because I have two children, I, they were denying me. I didn't qualify for it because they're only allowing two people per bedroom as like a contingency. And so the places I was eligible for were at least $1 ,700 a month. But my current salary situation wouldn't allow me to afford that. And so I'm really in this predicament like, well, what really are my options?

11:38Because the other thing is, you're not just working with owners, you're working through HOAs. A lot of the buildings and the homes, properties in this area are run by HOAs. And so they are much harder to work with. The owner was going to let me that one studio bath place for$1 ,300. The owner was like, yeah, just move in. It's great. You know, my children are little. When I was in the Airstream, all three of us were sleeping in a full-size bed. Like, we're fine, like they said, you know, But it just kind of puts things into perspective for what a single family can actually qualify for and what salary they have to be having in order to live here.

12:20You know, it just kind of put things into a big perspective for me. So thank you, by the way, for being so honest about how you guys are divvying everything up and the ins and outs of your preparation and divorce agreement. Did you guys have other shared assets like a joint bank account or retirement accounts? How did you handle all of that? Not really, actually. You know, we were both very independent before we met and got married. Like I mentioned, I had owned my house. I had my own bank account. I had my own retirement. And so we did dip into that. We dipped into my pension to buy the adjacent property.

13:00Also, I received some inheritance in our marriage, which funded a lot of these renovations. So I think in his mind, too, like this is a fair route to go because I have said I, you know, I was a stay at home mom for five years and I had a great career before then. I loved my job. I loved everyone I worked with. we had our son and the pandemic hit and it just didn't make sense you know for us to try to find child care for me to continue because I was commuting to and from Orlando so yeah we just decided I was going to be a stay-at-home mom and so I think again just coming back to the bigger picture when we decided how is this going to look I think we both did realize like we both gave everything we could to our marriage.

13:47I mean, not just emotionally and, you know, but financially, we both were really, Ryan put a lot of work into the Orlando house. I'm not going to lie. I mean, he totally renovated that. I think if you are to go this route where you do the nesting practice, you know, there is a lot of hard conversations, but it's a lot of honesty too. It wasn't just so one-sided because even though Ryan was the primary, you know, quote unquote breadwinner for five years. I was keeping him fed. And, you know, I was keeping his laundry clean. Like, I was like, because he's a rocket scientist, engineer, and I was like, they should put my name on that rocket, too.

14:26You know, you wouldn't be showing up. That's right. If it wasn't for me. And I think that a lot with all stay at home parents, you know, I mean, the other one can't be as successful. You can't be as successful without the other. 100%. 100%. And there's not that, you know, monetary value attached to the other side. So one time I tried doing the numbers, you know, if we hired a nanny and a lawn care provider and housekeeper, a cook, that's value, that's money. And I think, you know, thinking of the stay at home parents role in that way, you know, really helped me frame like, okay, this is a contribution for sure.

15:04Because I struggled with it at first. Having come from a career and, you know, always, since 16 being very financially stable like independently so why isn't your name on the house well so in our settlement ryan has this house and i ended up with the lot okay so my name i have the deed for the lot next door okay and i will build on the lot hopefully by march we you know we've submitted our plans to the engineer so hopefully i'll be submitting permits next week and we'll get going you know I kind of wanted to avoid the hurricane season but now I'm just really that's how I'm motivated to just get going yeah so the plan was basically you guys had two adjacent lots your ex-husband took the one that the house is on you took the next door one and you're planning to build a house so you guys will always live next door to each other, it sounds like.

16:07And, you know, we say always, but it's really, again, for the benefit of my kids, once my kids are 18, nothing's permanent when you have children. Every year is so different. And so I think in these early years when they're young, even throughout school, but the way I'm designing my house and, you know, we talked about it, I love to travel. I lived in Italy for a while. I'm originally from Minnesota. Like, I'm ready to go. like as soon as my kids are old enough to go on adventures. Once you decided that you were going to share this home and do a nesting thing and do, you know, a different schedule every week, it sounds like, were there some ground rules that you guys set up to try to make this arrangement work?

16:55Yeah, 100%. We both agreed, you know, we're not going to bring guests around here, you know romantic guests for at least a year have you guys started dating again no we just even talked about it last night we have a family dinner once a week which i like it's really nice for the kids and we'll try to hang out at least once a week if it's not a family dinner we'll try to do something a bike ride or but no i think he was saying last night it's so early and i think i agree you know it's all just kind of hitting us you know where it just happened i mean it was in April, but it's October now. It still feels very different.

17:33And I think because I'm still in the house so often, it just, I don't know, it's not like as clear of a cut break. And again, I need the kitchen, I need the laundry. And if there was another option for me, I think we would both be open to me finding an apartment for a year while I complete my build. Financially, that just doesn't make sense because I have these funds allocated for my build. If I start spending that on rent, you know, it just doesn't, it just doesn't add up. So I'm just hanging tight. It sounds like you guys are cool with each other. Yeah, we do. We get along really well. You know, I'll speak for myself.

18:14We again, like we do have our hard moments. Something happened last week. I'm trying to remember what it was. Oh, we had a birthday party for my son. And that was always just kind of, we're always you know stressed out when we're hosting things and I'm cooking you know like four cakes and 18 cupcakes and you know those moments are always heightened but you know we get through it and like again like I just want to emphasize this point like I don't know if this is like the best way for every family like I don't even know if it's the best way for my family I'm just we're trying to figure that out so far we're getting through it and so far like those hard moments we can handle, you know, Ryan and I both can flare up.

18:56And so if we just give space sometimes, and then come back to it, it's always better for us. It sounds like, yeah, the big picture is that this makes the most sense for you guys in the long term, financially, and there are a lot of potential growing pains, and some things to work out. But overall, this is the right financial decision for you and your kids. Yeah. Yes. I would say that. How do you guys divide expenses now? Like utilities, things that you're buying for the kids, property taxes? Yeah. I'm paying the property taxes on my lot. Utilities, I pay him a certain amount every month. Their school, my daughter is four.

19:43So she didn't qualify for kindergarten. So she's in this BPK program and my son is a kindergartner, but we're choosing to put them into a school for three days of the week. It's like a hybrid homeschool program. Anyway, it's not public school. So there's a cost to that. And we split that evenly. Groceries, we both contribute. I go to the grocery store a few times a week. He does too. And we just kind of share everything in there. That hasn't changed. Do you share a car? No, I have my own car that's paid off and he has his car that's paid off. Yeah, it was very easy because he also has a house he inherited from his dad.

20:22So when we did the settlement, it was really just straight down the line. I had my Orlando house and the lot and he had his Daytona house and our family's home. And so it was just kind of us deciding that together. and then we found a peaceful mediator who just kind of formed it all up. We had the judge sign everything, and then it was done. I mean, it was like the fastest divorce everybody tells us. But it was a lot of us deciding what we wanted and how we wanted it to look and what the holidays would look like. And that's something that we could just figure out on our own, which I know isn't the case for a lot of other situations.

21:04but again if you can do it that is also a cost saving that whole process cost us four thousand dollars and we split that evenly i know some divorces can get a lot more expensive and some are i will say and some are cheaper i mean you can file your divorce independently and just take it to the court yeah but i know people who do that and we just didn't have the time like we just or so. I feel like I'm taking it. I wouldn't have had the capacity to do that. Yeah, we've had a show on how to save on divorce. I mean, oftentimes the lawyers really win at the end of all this. And it sounds like you guys were amicable enough to work it out and really think about what's best big picture for you guys financially and not let emotions get in the way, which is so admirable.

22:00What did people around you think about all this? Were people confused? Were they supportive? Were they judgy? Some people have done very similar things. This isn't, you know, for a lot of people, this isn't kind of groundbreaking. A lot of families live like this and they were very supportive and understanding, you know, if you've lived through it or even if you have kids, I feel like there's a lot of understanding there just from the situation of having your own kids there have other been you know there have been other judgments uh you know like this this is crazy i think the worst was i had this lady be like well love heals everything and it's just like oh it doesn't oh that's kind of those kind of like comments really hill but I think it's a mixed bag and at the end of the day it doesn't the society's perception of this this is how the wall street journal found me is because I was in these groups on facebook support groups for separated and divorced parents and this woman was writing you know I want to do this it feels like the right step for us but I'm getting a lot of pushback from almost everybody in my life.

23:14And so I chimed in and said, do it, you know, I'm doing it. It's working for us. Like, you're not crazy. You know, I think a lot of that fear of going this route is the society's perception or, oh, man, and reading the comments on the Wall Street Journal when it published. Oh, I was like, I can't. Oh, sister. No, I just turned it off. Those are rough. I just, you know, the things they were saying about both of us, and I, you know, wanted to pipe in like he's a great dad you know but you know that's the hard part and you just have to bring it back to what's the best for your family there is a financial gain a hundred percent but the fact that our i think our kids if you ask them what does divorce mean they'd be like well my parents don't sleep together i you know i don't think they're phased by anything else like They don't have to move between cities.

24:09They don't have to even go down a different block. I mean, their lives have literally just not changed at all, despite us not going to bed together and waking up together. But even some mornings they do because I'll be in here before everyone gets up. Everyone in my family sleeps in except me. And so they wake up and I'm in the kitchen. And it's like, nothing's changed. And I think that's our vision too, you know, especially for big moments, like big moments, birthdays, holidays, like we envision us being together as a family for those moments, you know, for our kids. And knowing what you know now, what would you tell someone who's thinking about keeping a property with their ex?

24:56Because the interest rate thing is definitely real. We hear about this for families or individuals. Your situation is really unique, but there's this inertia with giving up low interest rates. Well, just to also clarify one thing, Ryan has a property and I have a property. So in one year, we might not be seeing each other as much. Today we are because we're sharing this. I'm living in here. so for me I think a huge differentiator with between others who are actually sharing one single property that is it you know because I know at the end of the day I'm going to have my own house in my own yard this is this is very temporary and that's a saving grace but for now you know I can speak to living together in this house and I would say you know you really have to ask yourself like can you communicate on a level-headed way because again you're modeling everything for your kids like your kids are all at least my kids are always around so like if we have a disagreement we both have to understand how we're going to get through that disagreement that isn't going to traumatize our children you know and I think that is a really big thing you have to be honest with like can you both handle that because if you can't you know it might not be the best solution for you because there will be hard moments you know in this arrangement it It's just inevitable.

26:25And so how do you communicate? How can you handle yourself? And when things are heated, when it's hard, yeah, finances or things like you were talking about, how do you divvy up groceries? And because, again, I don't think he'd mind sharing. But like when I make coffee, I spill the coffee grounds everywhere. Like he drives them crazy. And like that's always been a thing. And so like, you know, can we really tolerate these like things that we know are going to irritate us? But if you can also, I have so many Excel sheets on finances and like what I need to be out of this situation. And so does that make sense?

27:06I think knowing that this is temporary is very helpful for me to deal with it every day. And so I would suggest to for like couples who are doing this, just telling yourself this is temporary. This is the best for your children. Like have some kind of like soundbite or something to come back to you. That's like reassuring you because when it gets hard, you're going to want, you're going to have to stay strong somehow. And that's, that's what works for me. Yeah. When, not if, for sure. Would you have done anything differently in terms of getting a prenup or postnup or putting the house in both of your guys's name?

27:44Well, we did actually. We had it in both of our names for a while. We had both of our names on this house and the property and my Orlando house. And so I just took care of my Orlando house and then I had my kids. And so I just handed all the financial stuff over to him when I had the kids because I was barely hanging on. But that's why I don't know. But my name was on it. And so we, again, like we kind of sat down and divvied everything out and said how it's going to look. and then we did the quick claim deeds, you know, right. He's a very, he's a really good person and a great father. And so working this out wasn't a challenge.

28:25Like does that make sense? Yeah. Not every, not everybody can be a Ryan for sure. And so would you tell other people to maybe spell it out beforehand or do a prenup or postnup? Yeah. Or have some kind of plan. I mean, we never sold my Orlando house I never wanted to sell that house and I wonder if in a way I I did that because I don't know I I really don't know I mean I always thought I was going to you know it's going to increase in value and I was going to leave it for my kids but if I didn't have that and if I don't know how it would have you know worked out if you know he refused to get his name off that mortgage or something like that.