In times of personal or financial uncertainty, you might find yourself struggling to keep up with your mortgage payments, and if you fall too far behind, you run the risk of losing your home.

If you are currently facing challenges with covering mortgage costs and dealing with the anxiety of what may happen, or maybe you already have your lender knocking at the door, the good news is that you have options. Further, with the right proactive action, you can avoid a power of sale, foreclosure, or even losing your home. However, if you choose not to act, you could find yourself in hot water. 

This blog post is designed to offer guidance on this subject at a high level. However, our team would be happy to offer you personalized advice. Click here to send us an email or call 416-498-3444. 

What Happens If You Can’t Keep Up With Your Mortgage?

If you fall significantly behind on your mortgage payments, there are two potential outcomes that you could face – power of sale or foreclosure. While both of these processes will result in you moving out of your home, it’s important to recognize the differences between them. 

Power of Sale

During a power of sale, your lender earns the right to sell your property in order to recuperate the remaining costs of your mortgage. This happens while you are still the legal homeowner. After your home is sold, your debt is repaid with the inclusion of interest and the add-on costs of selling. Any remaining profits are passed on to you. 

Foreclosure

In the case of foreclosure, your bank or lender will formally take on ownership of your home and sell it to recuperate costs. After the debt amount is covered, your lender will keep any additional profits or returns from the sale. 

Wish to know more about the costs of owning a home in the GTA? Explore these blog posts. 

• 5 Things to Know Before Buying Real Estate in Greater Toronto
• Understanding the Costs of Selling a Home
• A Guide to Home Financing

What Should You Do?

If you are currently concerned that you may lose your home due to financial challenges, it’s best to get in touch with someone who can help as soon as possible. While seeking support related to finances may seem uncomfortable for some homeowners, it’s helpful to remember that professionals in the mortgage and real estate industries work with clients who are facing the same adversities as you every single day.

Your Bank or Lender 

One of the first steps to take if you’re struggling with mortgage payments is to contact your lender. Although financial conversations can be difficult, open and honest communication is vital. Depending on the circumstances, your bank or lender may be willing to work with you to find a mutually beneficial solution. This could include temporary payment relief, an extended payment schedule, or making modifications to your mortgage.

A Real Estate Professional

After speaking with your bank or lender, reach out to your real estate agent. While this may seem counterintuitive if you would prefer to keep your home, it’s a critical step in preparing for a potential worst-case scenario. A knowledgeable, well-connected real estate agent can provide critical solutions based on your personal circumstances. This may be selling proactively and landing a home that’s better suited to your financial resources or other market-informed tactics. 

Reaching out to an agent is imperative, especially if you are unable to reach a solution with your bank or lender. In the event of a Power of Sale or Foreclosure, you’ll be sacrificing a substantial portion (or all) of your equity, therefore selling voluntarily can be the best way to retain as much of your financial resources as possible. 

Considering the sale of your home? Regardless of your motivators for selling, you will find helpful advice in these resources from our blog. 

• Do I Need to Renovate Before I Sell?
• How to Get 100% of List Price in Your Toronto Home Sale
• Is it Smarter to Sell Before Buying?

Working With Bahia Realty Group

If you are concerned about the prospect of losing your home, reach out to our team right away. As experts in all things real estate, we have years of experience helping homeowners achieve the best possible outcome while facing financial challenges. 

We provide transparent, strategic advice to ensure you feel confident and informed while making the big decisions – all while providing compassionate end-to-end service. If you choose to sell your home, our refined selling strategies, which include our standalone performance guarantee, take the risk out of selling your home – ensuring a remarkable result. 

Worried that you may lose your home? Bahia Realty Group can help you. Click here to send us an email or call 416-498-3444 to get in touch.