The mortgage designed for people with high net worth
Pay interest for fifteen years. Then a structured financial product you fund at closing is designed to make the payments, and to keep paying you after the loan is gone.
On a $4,000,000 home
Offered by qualification, to households with $5M or more. About half the home’s price is committed at closing. Later figures are projected.
A jumbo mortgage paired with a structured financial product, for households with $5M or more.
Make it yours
IllustrationThe mortgage figures are arithmetic: 20% down, an 80% mortgage at an assumed 6.5% note rate in both cases, a 30-year amortizing loan against a loan that is interest only for 15 years and then amortizes over the next 15.
Projected payout is not calculated by this site. It scales a quoted illustration of $340,000 a year on a $1,200,000 contribution in proportion to the contribution for your home. It is not guaranteed, and an actual proposal uses the issuer’s illustration for a specific person. Property taxes, home insurance, maintenance, closing and advisory costs and tax effects are not included.
The advantage of capital
The thirty-year mortgage was designed for buyers who must borrow as much as they can and repay it from a salary. You have something they do not: capital. The Family Office Mortgage is built to use it.
Commit more on the first day, and a funded financial instrument — a premium-financed indexed universal life insurance policy — is designed to take over the payments halfway through, then keep paying you. It is the structure a family office puts around a significant purchase, built from three regulated parts: a home mortgage, that policy from a major issuer, and a bank loan that finances part of its funding.
From your lender or one we introduce. Interest only for fifteen years, then repaid over the fifteen that follow.
A premium-financed indexed universal life insurance policy, funded with about 30% of the home’s price from you, with a bank financing the rest of its funding.
The instrument has fifteen years to build. From year sixteen it is designed to fund the mortgage, and then to keep paying you.
01The timeline
$2M
committed at purchase
01At purchase
$800,000 goes to the home as a down payment. $1,200,000 goes into a structured financial product, and a bank finances its further funding. A lender provides a $3,200,000 mortgage.
About half the price, committed on the first day.
02Years 1 to 15
$17,333 a month, against $20,226 for a traditional loan. Meanwhile the financial instrument has fifteen years to build value.
That is $2,893 a month less than a traditional payment, for fifteen years.
03Year 16
The bank has been repaid, and the instrument is projected to provide $340,000 a year. The mortgage now costs $334,505 a year. The projected source of that payment is the instrument, not your income.
The instrument we use is a premium financed indexed universal life policy issued by a major insurance company. Like all products it has both benefits and risks — please review the Disclosures page. The cases illustrated on this website are examples of what we structure for family offices and individuals; only a full proposal made to you with a fully compliant carrier illustration and disclaimers may be taken as a formal proposal.
The payout is designed to the payment: $340,000 projected against $334,505 due.
04Year 30
Across thirty years you will have paid $5,120,000 yourself, against $8,081,424 with a traditional mortgage. Either way, you own the home outright.
That is $2,961,424 less from your own pocket.
05Years 31 to 62
With no mortgage left to pay, the projected payout of $340,000 a year is yours: the full amount of the payments it was making, to you — taken as policy loans, which are generally not taxed as income while the policy stays in force.
The illustrated period. The instrument is reviewed against its plan every year.
By qualification
The program is offered to households that meet its published criteria. Three ranges tell you where you stand, before you give a name.
02What it changes
Interest only for fifteen years. In the reference case, $17,333 a month instead of $20,226.
From year sixteen, the projected payout is designed to make the payments. Your income stops being the plan.
After the loan is repaid, the projected payout continues: $340,000 a year through year 62. In the reference case you put in $5,120,000 and the instrument is projected to pay you $10,962,422.
A benefit is designed to pass to your family, alongside a home that is paid for.
If you would otherwise pay cash, half the purchase price never leaves your accounts.
03Beside a traditional mortgage
Reference case: a $4,000,000 purchase.
The bottom line, projected through year 62
You put in $5,120,000. The financial instrument is projected to pay $5,017,578 of your mortgage, then pay you $10,962,422. Everything you put in comes back, and $5,842,422 more.
A traditional mortgage on the same home takes $8,081,424 from you over 30 years.
At purchase
Years 1 to 15
Years 16 to 30
Year 31 onward
The whole picture, through year 62
Illustration. Both cases assume a 6.5% mortgage note rate, a 20% down payment, and no investment of money kept or saved. The program’s projected payout is a quoted figure scaled to the contribution to the instrument; it is not derived by this model and is not guaranteed. The base case assumes no further personal funding of the instrument, financing interest or bank-exit payments. Property taxes, home insurance, maintenance, closing and advisory costs and tax effects are excluded.
04How you are protected
A mortgage paired with a bank-financed instrument has moving parts. Our team has structured hundreds of transactions, and each one is underwritten and managed so that you are protected.
We underwrite each transaction as a whole (the purchase, the instrument’s design and the financing) before anything is proposed to you.
Designs are tested with no growth credited in their first two years, the worst timing there is, and run across many market paths.
In the reference case, a projected payout of $340,000 a year is designed against $334,505 of mortgage payments.
The instrument’s values, the bank loan and the collateral are checked against the plan each year, so adjustments are made early.
Before you sign anything, your CPA and your attorney receive the issuer’s full proposal, a year-by-year spreadsheet that matches it, and a disclosure statement of about seventy pages.
05Stories
Two real designs from our own files, and the households the program is built for.
Client design, projectedFrom our files
She was forty and wanted two things from one decision: the home, and an income that would outlast the mortgage.
$4,500,000into the instrument
Client design, projectedFrom our files
He wanted the home paid for with room to spare, and nothing for himself afterwards. The rest was to build for his heirs.
$12,500,000into the instrument
IllustrationA primary residence
They could afford the payment. What they did not want was a payment that still depended on his operating schedule at sixty-two.
$2,000,000committed at purchase
IllustrationA cash buyer
He was ready to send $7,000,000 to escrow. He sent $3,500,000 instead and kept the rest working.
$3,500,000sent to escrow
06By qualification
The program is built for purchases of $4M and above. The structure, and the team’s attention to each case, are sized to homes at that level.
Total household assets, not counting the home being purchased. The program commits about half the purchase price up front, which a household of this size does comfortably.
You carry the interest-only payment yourself for the first fifteen years. The program is built around income of $500,000 or more a year.
Roughly 20% as the down payment and up to 30% as the contribution to the financial instrument. Where the instrument needs less, more goes to the down payment. On a $4M home that is $2M at closing.
07Your CPA and attorney
The people who advise you should see everything we see. We have written a technical brief for them: how the three loans fit together, how each case is underwritten, and the documents they will receive.
08The team
Real estate advisory
DRE #02283898
Berkshire Hathaway HomeServices California Properties
A Harvard-trained economist who spent decades in institutional finance before returning to the coast he grew up on.
President & Founder, Finestone VFO
CA Insurance Lic. #0748510 · NPN 1540337
Finestone Virtual Family Office
President and founder of Finestone VFO, a virtual family office with a national network of tax, legal and financial specialists.
By qualification
Three ranges tell you where you stand against the published criteria. If you meet them, Kent Chesley will speak with you personally.
Prefer to talk? Call him directly at 949-293-8686. Kent Chesley, DRE #02283898.
Sell homes at this level? The page for agents.
Rather read first? The Letter — one idea a month.
