As Canada’s housing market becomes increasingly volatile and unpredictable due to rising interest rates, many homeowners may face difficulties paying their mortgage payments, which could trigger a power of sale.
What is a power of sale?
A power of sale is a clause that permits lenders to seize and sell a homeowner's property when the lender sees a pattern of consistent missed mortgage payments over a period of time. Failure to make monthly payments, pay property taxes and upkeep home maintenance are all factors that a lender can point out as reasons to justify a power of sale.
How to stop a power of sale
Majority of homeowners will do everything financially possible to avoid defaulting on their mortgage. However, in the event that you’re unable to meet these responsibilities, the best way for you to stop a power of sale is to bring your mortgage out of default by paying arrears and legal fees. Alternatively, you can also pay the mortgage off in full along with the legal fees.
We know this is easier said than done and that paying these high amounts can be challenging. In this case, another option is to sell your home before a power of sale happens. By selling your home, you may be able to avoid financial loss.
Here are some steps you can take to sell your home before a power of sale:
- Consider your finances: Before selling your home, assess your financial situation and get professional advice from a mortgage and financial advisor.
- Contact a real estate agent: A real estate agent can help you price your home correctly and handle the negotiation and closing process.
- Concentrate on pricing and promoting your property effectively: Working with an experienced real estate agent, review the prices of homes in your local area and advertise through various channels to attract as many potential buyers as possible. Hosting open houses is helpful too.
- Be flexible in negotiations and close the sale: Stay open-minded and focus on getting the best deal possible. Once you’ve found a buyer and agreed on a price, work with your real estate agent and a lawyer to complete the sale and transfer ownership.
To stop a power of sale, it’s important to be proactive and act quickly. It’s best to seek expert advice from professionals and take advantage of the resources available to you.
At Homewise, we understand that purchasing a home is a major responsibility and that homeowners may face unprecedented challenges with paying their mortgage. We’re dedicated to providing homeowners with key information to help protect your home and guide you in the right direction. Connect with us today.
