Case Study
Divorcee with Rental Property
Complex Situation
6 yrs
Payoff Time
$394,542
Interest Saved
$52,980
Retirement Income/yr
$53,276
Additional Savings
Strategy Comparison
| Current Scenario | MEG Strategy | |
|---|---|---|
| Total Interest Paid | $468,889.65 | $74,347.41 |
| Interest as % of Loan | 94.71% | 14.72% |
| Total Payments | 348 | 66 |
| Years to Pay Off | 29.0 years | 5.50 years |
$394,542.24 in interest savings
The Situation
A recently divorced individual with a $425,863 mortgage on a $470,000 home. With 29 years remaining at 5.375% APR and $2,801 monthly payments, they would have paid a crushing $468,890 in interest—nearly 95% of their loan amount! They had a rental property expected to sell for $250,000 within the year. Net monthly income: $8,000 with expenses of $4,801, leaving $3,199 cash flow.
Our Approach
Structured the MEG strategy to incorporate the upcoming $250,000 home sale proceeds at month 12. Used a $423,000 credit limit combined with wealth-building life insurance. This unique approach reduced interest from 94.71% to just 14.72% of the loan—cutting 348 payments down to 66.
The Outcome
Mortgage-free in 5.5 years instead of 29 years. Saved $394,542 in interest plus $53,276 in additional loan savings. Created $52,980/year retirement income starting at age 65. Death benefit of $1,601,212 with $800,606 chronic illness protection and $250,000 critical illness lump sum.
Financial Details
Loan Details
- Home Value
- $470,000
- Mortgage Balance
- $425,863
- Current APR
- 5.375%
- Line of Credit Rate
- 7.50%
- Months Remaining
- 348 (29.0 years)
- Monthly Payment
- $2,801.36
- Credit Limit Used
- $423,000
Income & Cash Flow
- Net Monthly Income
- $8,000
- Monthly Expenses
- $4,801
- Monthly Cash Flow
- $3,199
- Total Debt
- $425,863
Wealth Building Benefits
Tax-advantaged retirement income and protection built into the strategy
Wealth Building Benefits
- Death Benefit
- $1,601,212
- Tax-Free Retirement Income
- $52,980/year
- Starting Age
- 65
- Chronic Illness Benefit
- $800,606
- Critical Illness Lump Sum
- $250,000
Combined Tax-Free Retirement Income
$52,980/year
Key Results
$394,542
Interest Saved
24 Years
Paid Off Early
6 Years
Total to Mortgage Freedom
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