Posted on: 24 March 2017
If you own a house and fall behind on the payments, there are several things that could happen. The first is that your lender might foreclose on the property. While this is not a good thing, a foreclosure will give you more time to figure out a way to stop it from happening so you can keep your home. The other thing that could happen is called a power of sale. This is similar to a foreclosure, yet it goes much faster. If you received a letter that your lender is planning on using a power of sale on your house, here are a few things you should know.
How this works
A power of sale is like foreclosure in the way that you will lose your house if it goes through; however, a power of sale works faster. If your mortgage has a power of sale clause in it, your lender will have the right to sell your house quickly if you default on your payments. If the house sells for a price higher than what you owe on the loan, you will receive a check for the difference. If the house sells for a lower price, you will have to pay the difference.
How you can stop this from happening
If you receive a letter from your lender stating they plan on selling your house through a power of sale, you will not have time to contemplate what you should do, unless you do not mind having to move out of your home and lose the house. If you want to keep the house, you have several options, which include the following:
- You could pay off the past-due balance and bring your payments up to date. This would be enough for the lender to stop the sale from occurring.
- You could work out a different deal with the lender, if the lender is willing. If you contact your lender right away and can offer a good deal for catching up on your past-due balance, the lender might agree to stop the power of sale.
- You could look for a different lender to offer you a loan. If you could refinance, you could also stop this from happening.
You will not have a lot of time to work with, though, so you should call your lender as soon as possible if you want to stop this from happening. If you have any questions about this, contact a lender such as Mortgage Associates Ontario.Share