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Tapping a Flow of Cash From the Credit Cri
to buy the property without liquidating other investments that would have meant paying capital gains taxes.

There are three popular options that the very rich have been using to get cash out of real estate they own:

¶ Interest-only mortgages, the bane of so many less affluent borrowers, are well suited for the wealthy. With them, wealthier borrowers can reap the full tax benefits of a mortgage while reducing the principal only when it suits them. “It’s a cash flow management tool,” Mr. McPartland said.

¶ Adjustable-rate mortgages, or ARMS, are a second popular tool. Ms. Gorman says clients can get one-month ARMs with rates in the high 3 percent range. “ARMs historically have not been a bad play for wealthy clients,” she said. “If the market moves against them, they can pay down or pay off their mortgages.”

Jeff Kauffman, president and chief executive of Northern Trust’s Personal Financial Services Business in the Northeast, takes a slightly longer view, recommending adjustable-rate mortgages that lock in a lower rate for up

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