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How I Helped My Client Avoid a Costly Mistake
January 24, 2025 | Posted by: Nicholas Pratile
A client recently came to me with a renewal letter from their current lender, arranged by a previous broker. The client was ready to sign a 5-year fixed-rate mortgage simply because it offered a lower monthly payment. The previous broker had told them there wasn’t much else that could be done and left it at that.
When I reviewed the client’s financial situation, it became clear that while the lower payment seemed appealing, they could only realistically sustain it for 8–12 months before significant changes would be needed. Signing the fixed-rate mortgage could have locked them into an inflexible situation with costly penalties.
We had a deep discussion about their goals and ran through several 'what-if' scenarios. Together, we created contingency plans for different future outcomes. It became evident that opting for a variable-rate mortgage was the smarter choice. Although the monthly payment was slightly higher, this option would save them thousands of dollars in penalties if they needed to break the mortgage down the road.
Now, we’re working on a 6-month financial strategy to put them even further ahead and save more money. By taking the time to explore all options, the client avoided a decision that could have been financially draining.
If you’re unsure about your mortgage options, let’s talk—it could make all the difference!'
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