A $15M home, then an income for life

She was forty and wanted two things from one decision: the home, and an income that would outlast the mortgage.

Into the instrument: $4,500,000$1,125,000 a year for four years
Years 16 to 30: $1,255,000a year, projected, to pay the mortgage
From age 70: $1,251,528a year to her, projected to age 100

What she wanted

A home, and an income that would continue for life once the home was paid for. She was 40 when the design was prepared.

How it was structured

The design is sized to a $12,000,000 mortgage. On the program’s standard terms that is a $15,000,000 home with $3,000,000 down. She pays interest only for fifteen years: $65,000.00 a month at an assumed 6.5%.

Alongside the mortgage she contributes $4,500,000 to a structured financial product over four years, $1,125,000 a year. A bank finances the rest of its funding and is repaid from the instrument in year 15.

What the design shows

From year 16, when she is 55, the instrument is projected to pay $1,255,000 a year for fifteen years. The mortgage payment over those years is $1,254,395 a year, so the payout covers it.

At 70 the mortgage is repaid and the payout continues to her: $1,251,528 a year, illustrated to age 100. By 88 the design shows $42,604,032 paid out and a further $32,716,298 for her family.

How it was tested

The design was run with no growth credited to the instrument in its first two years. It shows no further collateral called in either year.

The numbers

The design

Client design, projected

Home price: $15,000,000
Down payment, 20%: $3,000,000
Mortgage: $12,000,000
Into the financial instrument: $4,500,000$1,125,000 a year, years 1 to 4
Bank financing repaid: Year 15$14,025,765, from the instrument
Her payment, years 1 to 15: $65,000.00 a monthInterest only
Projected payout, years 16 to 30: $1,255,000 a yearAgainst a mortgage payment of $1,254,395 a year
Projected payout from age 70: $1,251,528 a yearIllustrated to age 100
Paid out by age 88, projected: $42,604,032
For her family at 88, projected: $32,716,298
With no crediting in years 1 and 2: No further collateral called

From a design prepared for a client, who is not named. The home price and down payment are the program’s standard terms applied to the design’s mortgage. Every payout and benefit is the design’s projection and is not guaranteed. Mortgage payments are calculated at an assumed 6.5%, which is not a rate offer.

Try it with your numbers

Find out if it is open to you.

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.