A power of sale is a legal action that is initiated when you default on your mortgage. A mortgage default is caused by missed payments from the homeowner. This means that you have broken the terms of your mortgage agreement and your lender is legally allowed to start the process of taking control of your home to get their money back.
Your lender can start a power of sale proceeding as early as 15 days after you miss a mortgage payment.
In Orillia, your lender can use power of sale to seize and sell your home to get their money back. When your home is sold through power of sale, your lender is repaid including their legal and real estate fees, and you keep the remaining funds.
Many homeowners in Orillia and across Canada are losing income from COVID lockdowns. The possibility of mortgage default and power of sale is increasing.
What You Can do to Prevent or Delay a Power of Sale
If you think you are at risk of defaulting on your mortgage, contact your lender as soon as possible. Explain your situation and why you won’t be able to make your next payment. Most lenders do not want to lose a paying customer and be open to renegotiating your loan agreement for monthly payments that are easier to manage.
You can try to reduce your monthly mortgage payments by asking for an extension of the amortization period. The amortization period is the length of time you must repay your entire mortgage. By extending the amortization period, you reduce your monthly principal payments, however, you will be making payments with interest for a longer period.
Stopping a Power of Sale or Foreclosure in Progress
A foreclosure is when the lender takes over the ownership of your home. A lender who sells your home under foreclosure keeps all the proceeds from the sale.
If your lender has started a power of sale or foreclosure against you, paying them back is the only way to stop them from taking your home. You can repay your lender any time before they sell your home, which will stop the power of sale or foreclosure.
You can get a second mortgage to help repay the lender of your first mortgage. Usually, second mortgage payments are interest only, providing you with the funds you need to repay your lender and to get your first mortgage back on track.
Another option is mortgage refinancing. Mortgage refinancing completely replaces your old mortgage with a new one, fully repaying your lender and stopping any foreclosure or power of sale against you.
In today’s market, there is a good chance that when you get mortgage refinancing, your new mortgage interest rate will be lower than what you were paying on your original mortgage. Mortgage refinancing is set to the current markets’ interest rate, saving you money in reduced monthly payments when interest rates are low. You must have a high income and credit score to qualify for mortgage refinancing.
Do You Lose All Equity in Foreclosure?
If your home is foreclosed, you lose all the equity you had in the home. During foreclosure, your lender receives the deed to your property, effectively making them the new owner and allowing them to use your home however they please. Typically, they will sell your home as quickly as possible to recuperate their money.
Get Help from Power of Sale Experts in Orillia, Ontario
If you are concerned that you might be facing a power of sale or foreclosure on your home, get good advice right away.
You can get help from power of sale experts in Orillia by contacting the Mortgage Broker Store. They can help you understand the power of sale or foreclosure process and explain the options available to you to save your home.
You may be able to leverage the equity you have in your home to get the funds you need. If you own a home in Orillia, you may have more equity than you think. Throughout 2020, countless numbers of millennials and remote workers have been leaving the GTA for smaller cities and rural communities. This migration has led to rising home values in Orillia. In September 2020, the average price of a home in Orillia was 12 per cent higher than in September 2019. Talk to the experts at the Mortgage Broker Store. They can provide a quote at no cost and help develop a strategy that maximizes your home equity to stop power of sale.
The Mortgage Broker Store’s team of private lenders and mortgage brokers in Orillia have been helping homeowners tap into their home equity to achieve all their financial goals.