What to Do If You’re Facing Foreclosure on Your Home
If you’re reading this, chances are you’re worried about losing your home. First, take a deep breath. Foreclosure is scary, but you’re not alone, and there are steps you can take to try and save your home or at least make the process easier.
Let’s talk about what you can do if you’re facing foreclosure and how you can take back control of your situation.
Steps to Take If You're Facing Foreclosure
1. Don’t Panic – Take Action Fast
Ignoring the problem is the most harmful thing you can do. Many people feel overwhelmed and hope it will just go away, but the sooner you act, the more options you have.
2. Understand Why You’re in This Situation
Understanding the reason will help you decide the best way to fix it. Ask yourself:
- Why are you facing foreclosure?
- Have you lost your job?
- Are medical bills piling up?
- Did unexpected expenses throw off your budget?
- Is your mortgage payment too high?
3. Talk to Your Mortgage Broker – They Might Help
This might sound surprising, but your lender doesn’t actually want to take your home. Foreclosures are expensive and time-consuming for them. Many lenders are willing to work with you if you communicate early.
What can you ask them?
- Loan Modification – Your lender may change the loan terms to make payments more affordable.
- Forbearance – They might let you temporarily pause or reduce payments.
- Repayment Plan – You could spread out missed payments over time instead of paying everything at once.
Call your mortgage broker, explain your situation, and ask what options they can offer.
4. Know Your Legal Rights
Every country, state, or province has different foreclosure laws. Some places require the lender to take you to court; others allow them to sell your home without a lawsuit.
Find out:
- How long does the foreclosure process take?
- What rights do you have to fight it?
- Can you get extra time to save your home?
If you’re unsure, talk to a foreclosure lawyer or housing counsellor for guidance.
5. Check If You Qualify for Government Help
There are programs in Canada that can help homeowners in trouble. Some options include:
- Canada Mortgage and Housing Corporation (CMHC) Support: If you have a CMHC-insured mortgage, you might qualify for special repayment plans.
- Provincial Assistance: Some provinces offer relief programs, so check what’s available in your area.
6. Look for Other Ways to Catch Up on Payments
If your lender won’t modify your loan, you’ll need to find another way to get back on track. Here are some ideas:
- Increase Your Income – Can you take on a part-time job or freelance work?
- Cut Unnecessary Expenses – Review your budget and cut anything that’s not essential.
- Sell Assets – If you own a car you don’t use much, jewelry, or electronics, selling them might help.
- Ask for Help – Family or friends might be able to lend you money to get through this rough patch.
7. Consider Refinancing
If your credit score is still decent, refinancing could lower your monthly payments. This works best if mortgage rates have dropped since you got your mortgage. Talk to different lenders to see if refinancing is an option.
8. Sell Your Home Before the Bank Does
If you know you can’t afford your mortgage in the long run, selling your home on your own terms is better than having the bank take it.
You can:
- Sell it yourself – If your home has equity (worth more than you owe), selling it could help you pay off your mortgage and even leave you with some extra money.
- Try a Short Sale – If your home is worth less than what you owe, the bank might agree to a short sale, letting you sell it for less and forgiving the remaining debt.
Talk to a real estate agent who specializes in foreclosure cases to guide you.
9. Beware of Scams
Desperate homeowners are often targeted by scams promising to “save” them from foreclosure. Be careful of:
- Companies asking for upfront fees – Legitimate help is usually free or charges only after services are provided.
- Anyone asking you to sign over your home – This is a huge red flag!
- Too-good-to-be-true promises – If someone guarantees they can stop your foreclosure no matter what, be cautious.
Check with a lawyer, mortgage broker or housing counsellor before signing anything.
10. Know When to Walk Away
Sometimes, despite all efforts, saving the home isn’t possible. If keeping your home will lead to endless financial stress, it may be smarter to walk away. In some cases, private mortgage lenders offer a deed in lieu of foreclosure, where you return the home to the bank without foreclosure damaging your credit as much. This is a tough decision, but your financial future matters more than any one house.
Final Thoughts
Foreclosure is stressful, but you have options. The key is to act quickly, understand your rights, and explore all possible solutions. Whether you save your home or find a way to move on with the least damage, you are not alone. There are professionals, programs, and strategies to help you. Take control of the situation and make the best decision for your future.
Need help? Talk to us at Alpha Mortgage House Corporation today, which is located in Surrey, BC. The sooner you act, the better your chances of keeping your home or making a smooth transition to a fresh start.
Alpha Mortgage House Corporation is a Mortgage Broker in Surrey, BC. We provide mortgages for Home Purchases, Project financing, Second mortgages, Commercial mortgages, Mortgages for first-time home buyers and more. Alpha Mortgage is a one-stop solution for all your mortgage needs. Our team works with top lenders to provide you with the best financial options.