Stopping a Power of Sale in Scarborough
If you’ve missed some of your mortgage payments, your mortgage lender may put you into Power of Sale. Not to be confused with Foreclosure, Power of Sale is the most common method in Ontario for mortgage lenders to recover their investment. While Foreclosure is also an option for lenders, Power of Sale is preferred since it can be completed in four to six months whereas the typical Foreclosure takes over a year. Power of Sale differs from Foreclosure in that in Power of Sale, the lender sells the property and gives the former owner any sale profits, but in Foreclosure, the lender takes title to the property and leaves the former homeowner with nothing. In most Power of Sale situations, all fees related to the mortgage are charged back to the mortgage. In terms of Power of Sale fees, when the house is sold upwards of $30,000 in fees can be charged to the mortgage, reducing the former homeowner’s profit from the sale. It is usually in the homeowner’s best interest to stop the Power of Sale to stop the associated fees.
Why Are People Put in Power of Sale?
People can be put in Power of Sale for a variety of reasons, but the most common reason is a failure to make mortgage payments. Other reasons a lender may use Power of Sale include failure to keep the property insured, failure to keep other mortgages in good standing, or violating some other terms of the particular mortgage agreement. No one signs up for a mortgage with the intention of not making their payments, but sometimes unexpected life events make it difficult to make payments. Common reasons for missing payments include divorce, unexpected sickness, and loss of employment. Many times people make arrangements for family to lend them money or insurance to pay money but have no fallback plan if these sources of money don’t come through.
What Can You do to Stop a Power of Sale?
If you are put in Power of Sale by your lender, it is important that you act immediately. As the lender progresses with the Power of Sale they will increase their fees with every document they process. Stopping the process early means that fewer fees will be added to the mortgage. One way to stop the Power of Sale process is to replace the in default mortgage with a new mortgage. Typically people in Power of Sale are considered to be high risk, and the only lenders who would be able to provide a mortgage would be private lenders. Private mortgage lenders can ignore any issues with credit or income and they base their mortgage approvals on the equity in the property. In Scarborough and the rest of the Greater Toronto Area, most private lenders can lend up to 80% of the value of the property. Once the lender approves the mortgage, they will arrange to pay off the in default mortgage and stop the Power of Sale.
Selling the Property to Prevent Power of Sale
If you have tried to get approved for a private lender mortgage and failed, then you should seriously consider selling the property yourself. If you owe more than 80% of the value of your property then getting a mortgage of any kind is highly unlikely. Generally, you will make much more money selling the property yourself than allowing the lender to sell it. When a lender sells your home their main concern is the recovery of their own money. This means that a lender can sell for a price lower than the true value of the property. The mortgage lender may also use a discount real estate agent who may not take all the necessary steps needed to get the top price for your property. By deciding to sell the property yourself you will have more control over the entire sale process and stop any unnecessary fees the lender is likely to charge.
How a Mortgage Broker Can Help
Finding a lender to provide a mortgage to stop a Power of Sale can be difficult. In Ontario, there are hundreds of lenders, but many do not advertise their services and many will not help people in Power of Sale situations. A licensed mortgage broker can simplify the entire mortgage process and help you get a mortgage quickly and smoothly. The team at https://durhamfirstmortgages.com/ specializes in helping people get out of Power of Sale and Foreclosure situations. They have a network of private lenders across Ontario that can provide mortgages with the purpose of stopping a Power of Sale. To contact the Durham First Mortgages team call 647-313-4565 or email Info@durhamfirstmortgages.com.
