Question: I have had my condo up for sale/rent for several months, with no luck. I am now living in a different city and paying double housing costs. Even if I do sell this condo for the asking price I will owe $5000 as I did not pay any down payment and what i have paid off ($300 every 2 weeks) has merely been taken off the interest. I can’t keep this up.
What happens if I just turn in the keys to the lender?
Answer: This is a very common question given the weak real estate market across Ontario. If you simply stop paying the mortgage and surrender the keys to the mortgage holder, the lender will eventually foreclose on the property and sell it. They will then pursue you for the shortfall. The shortfall could be large, because in addition to the outstanding amount on the mortgage they will add in their legal costs, outstanding condo fees and property taxes, and other costs. If you can pay them, that’s your best option.
If you are unable to make the payments, you should consult a trustee for further options.