For any homeowner, one of their worst fears is about having to give up their home. There may come a time when you are unable to make multiple payments towards your mortgage. In such cases your lender would try to resort to a legal process called Power of Sale or he/she may opt for foreclosure too. If they are granted this Power of Sale you are certain to lose your home, which is a worrisome situation to be in. But fret not, you have some options to save yourself and your home. Firstly you need to know the difference between Power of sale and Foreclosure. Power of sale gives the lender a right to evict the homeowner and sell the property to get their money back. Foreclosure on the hand refers to the lender taking the home title away from you. In a foreclosure, they may or may not choose to sell the home. Power of sale is not invoked immediately and the defaulting homeowner gets a notice of sale, around 15 days after they have defaulted in making the payment. Post this the homeowner has a redemption period of 35 days in which they can try to stop the sale of the house. Naturally, the homeowner would have to pay off all the dues including mortgage arrears, legal fees and penalties, so that their mortgage status goes back to what it was before you defaulted. The Notice of Sale enlists all the amounts due in order to stop the Power of sale. In case, the homeowner fails to pay the dues after the redemption period comes to an end, the lender has the right to proceed with the eviction process. The best bet of the homeowner would be to make the payments immediately. So how does one avoid this power of sale? In order to arrange for funds to pay off the amount due you could use your savings or get another loan to pay off this one. But chances are you've already exhausted those options. So the next options you have are taking a second mortgage, going for home refinance or taking a home equity loan. Home equity loan is beneficial as you pay off dues and penalties as well as get back to paying mortgage payments on a regular basis. To avoid power of sale using home equity, you would need to connect with a mortgage broker who specializes in such work. Banks aren't helpful in such cases. Private lenders may come to the rescue too but at a greater interest rate. After staying in and investing in your home over the years, if you are unable to pay the mortgage for an unexpected reason such as an illness or loss of job, you can overcome the situation with the right knowledge and guidance. If you have any questions about the Power of Sale or foreclosure, or if you are facing any of these and feel threatened, do write to us at LendX Financial in Brampton, Greater Toronto Area.
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