Ever since my first tax class in law school, I have been fascinated by wealth and the journey one takes to achieve it. Driven by this passion, I have spent almost 20 years advising wealthy families how to navigate their financial lives in my roles at Goldman Sachs, BNY Mellon Wealth Management and now, at my own firm, Chequers Financial Management. Over the years, I have learned that the psychology of money – and the ability to understand our individual money stories no matter how much money we may have – is the key to making better financial decisions. I enjoy exploring financial issues through the lens of psychology, pop culture and history. As the founder of Chequers Financial Management, a female owned boutique tax and financial planning firm in San Francisco, I work with clients across the country, helping them achieve their financial and life goals.
Typically, in cases like this, the mortgage product of choice is the Interest Only Adjustable Rate Mortgage or ARM. With an ARM, the bank loans you the funds, but you pay only the interest on the mortgage for a defined period of time. At the end of the term, the rate adjusts, and the mortgage amortizes with both interest and principal.
Another tool built into the Interest Only ARMs that the wealthy often use is the recast provision. This allows that if the mortgage holder makes a principal paydown of the loan, the loan ‘recasts’ itself to adjust the monthly interest payment to be based off the new mortgage balance.The wealthy often want their real estate purchases to remain private, which is likely the case with Harry and Meghan.
This is where privacy comes in. Harry and Meghan have likely used one of their financial professionals to serve as trustee. This is not uncommon, and often the trustee’s address is on public documents in to avoid using the address of the wealthy trust grantor. The wealthy often use certain high-end carriers who focus on the more expensive properties and assets. Such firms include AIG, Chubb and Pure, which can provide a higher-end experience for the wealthy.
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