Struggling With Your Mortgage? Here’s How to Avoid Foreclosure

08.07.2024 Homeowners

It’s a tough time for many homeowners right now. With higher interest rates, many people needing to renew their mortgages are facing much higher payments. Additionally, many who opted for variable mortgages when rates were low are now dealing with significantly higher monthly payments.

If you’re finding it hard to make ends meet, know that you’re not alone, and there are steps you can take to avoid losing your home.

Understanding Foreclosure

Foreclosure is a legal process where the bank takes back your home because you haven’t been able to make multiple payments. This is usually a last resort for the bank.

They don’t want to go through this any more than you do. It’s costly and time-consuming for them, too.

Options to Consider

Before things reach that point, here are a few steps you can take:

  1. Sell and Downsize: One option is to sell your home and move to a smaller, more affordable place or rent. It’s a tough decision, but it might be the best way to protect your financial future. This route assumes you have enough equity in your home to pay off your current mortgage, all real estate and lawyer fees, and any bank penalties for discharging early.
  2. Refinancing: Refinancing your mortgage means getting a new loan to replace the original one. This could lower your monthly payments, making them more manageable. For example, you might be able to secure a lower rate on a fixed mortgage if you are currently on a variable one or extend your amortization period. Talk to your lender to see if this is an option for you.
  3. Communicate with Your Lender: Don’t ignore calls or letters from your lender. Open up a line of communication and let them know you’re having trouble. They might be able to offer solutions, like a temporary reduction in payments or a loan modification.
  4. Consider Renting Out Your Home: If you can’t afford to keep up with mortgage payments but don’t want to sell, renting out your home and moving in with family, or renting out a portion of your home or rooms to students, can provide some relief with a steady income stream.
  5. Bankruptcy or Consolidation: Filing for bankruptcy can provide a temporary halt to foreclosure proceedings and may give you time to reorganize your finances. In Canada, consumer proposals are another option that allows you to consolidate your debt and make manageable payments. Consumer Proposal: This is a legally binding agreement set up by a licensed insolvency trustee. It allows you to keep your home and negotiate a plan to repay a portion of your debt over time, often with reduced monthly payments.
  6. Seek Professional Help: There are housing counsellors and financial advisors who specialize in helping people avoid foreclosure. They can offer guidance and support tailored to your situation.

How Your Realtor® Can Help

A knowledgeable Realtor® can be a valuable ally in these tough times. They understand the local market and can provide insights into selling your home quickly and at a good price if that becomes necessary. Realtors® can also help you evaluate whether downsizing or refinancing is a better option based on current market trends.

Additionally, they have connections with lenders and financial advisors who can assist you in exploring all possible solutions. Having a Realtor® by your side ensures you have a professional guiding you through each step, making the process less overwhelming and helping you make informed decisions to avoid foreclosure.

If you’re struggling to cover the cost of your house, downsizing can be the answer. The posts below will help if that’s a route to explore:

Take Action Early

The earlier you address the issue, the more options you’ll have. Waiting until you’re months behind on payments limits your choices. Reach out for help as soon as you realize there’s a problem.

No one wants to lose their home, and foreclosure is not an inevitable outcome. By considering your options and taking proactive steps, you can find a solution that works for you and your family. Remember, it’s okay to ask for help and explore all the avenues available to you.

Do you have questions about what to do next when falling behind? Our caring and knowledgeable Niagara real estate agents are here to help. Reach out to or call 905-357-8067 to connect with us today.

Want to receive more real estate tips?

Join our mailing list here to get our exclusive newsletter with expert real estate insights and advice from our local agents.

Sign Up