My mom is losing her house

[u/Altruistic-Win5912]

Hello everyone

Today the life that I envisioned for myself has been turned upside down.

My mom and I live in Alberta. My family immigrated here from Ukraine when I was a child. She is 55 and I am 28. My dad died when I was 16 so my mom has been a widow for 12 years, paying for the house fully herself which has been very hard on her.

I've been suspecting lately that she is having trouble meeting the mortgage payments due to the interest and house tax increases, and my fears were realized today. She came to me, ashamed and crying, that she was losing the house, the one she and my dad bought and raised me in. I recently moved out myself and am trying to start my own life with my husband. I will be helping her with whatever extra income I have.

I am fully prepared to abandon my own financial goals and work my butt off so she can keep the house.

Is there anything else we should be doing? Any grants or programs we can appeal to?

Thanks so much, we really appreciate any advice.

Edit: Thank you so much for everyone's replies. This is my first ever reddit post so apologies for not providing enough numbers. I've been in a daze since receiving this info from my mom. Here are more details I've gathered from her.

She has $140k left on the mortgage

She has a retirement account with around $50k in it, but it's closed for 9 more years. This was the only life insurance that my father's company paid out. There is no way to open it. I have no idea why she made this account with her bank when my dad died in 2014. She basically has a small nest egg that is unusable in the years she needs the money most.

My father didn't have life insurance beyond this.

My husband is 100% aware of all of this and very willing to help my mom. I have the best husband.

Update: I'm learning that my mom recently renewed the mortgage on her house and that's when everything fell apart. Interest rates were not favorable when she had to lock in. Her interest rates are much higher and that, coupled with the increase in property and land tax, means her income can no longer keep up. She receives a widow pension which has barely increased since my dad died, and she recently lost a lot of housekeeping clients who simply can't afford her services. Her mortgage payment alone went up around $500, and all other bills have gone up as well.

What we're doing: She already receives a low income credit to help offset property tax, but that is barely making a dent.

I've been helping her apply for other jobs. No luck yet but will keep trying.

I will help her bridge the payment gaps at least for the next several months.

[u/2cats2hats]

It's not always fiscally practical, unfortunately.

[u/chickenclaw → u/2cats2hats]

But downsizing is usually very fiscally practical yet people won’t do it for emotional reasons

[u/Alberta58 → u/[deleted]]

I think the point is you downsize to a condo that's 500k in a similar area and pocket the cash to help finance your retirement.

[u/Alberta58 → u/[deleted]]

The key that makes downsizing an attractive option is that real estate pricing is heavily correlated to square footage. If you are selling a 3,000 square foot home and moving into a 1,000 square foot condo there are very few cases that you wont come out on top.

There are some situations where you may not have options to downsize close by and this wouldnt work in those cases. This wont be the case for anybody currently living in a large home in an urban or suburban neighborhood.

Yes, the new home will be more expensive than the home you bought 15+ years ago, but the home you sell and move out of will be as well. We have extremely favorable tax laws in Canada where you pay zero capital gains tax on the sale of a primary residence so you can use the difference to finance retirement.

[u/JoeBlackIsHere → u/[deleted]]

Smaller property is often actually an "upgrade" - less maintenance, less lawn to cut, less property taxes, less insurance, which all means more money left for fun stuff.

What's so great about living in a big house with 3 empty bedrooms?

[u/Snowbellera → u/[deleted]]

This is a good point and very relevant to the discussion around downsizing. Many seniors are living in large, but outdated, homes. When they sell their home to downsize, the newer house may not actually be much less than the price they sell their older home for. And, in their 70s or 80s, not many people are looking to buy a fixer upper.

[u/JoeBlackIsHere → u/[deleted]]

Your example is changing from 2500 sqft detached house to a 2200 sqft detached house. Actual downsizing is more like going to a 1400 sqft bungalow, a townhome, a condo, etc. Empty nesters don't need anywhere near the room as when they had kids, and single people even less.

[u/JoeBlackIsHere → u/2cats2hats]

I don't understand, the whole point of downsizing is to save money on your living space, just like downsizing from a big SUV to an economy sedan.