Foreclosure sales quite often are thought to be really good deals, but are they?
Depending on your current situation, a sale on a foreclosure might be the right fit for you, but it is important to understand how the process works so that you can decide. When a homeowner defaults on their mortgage here in Canada, the lender will commence the process that will result in a court ordered sale. Foreclosure proceedings must be commenced by a petition that sets out the relief sought and then sets out the factual basis for the relief, once the petition is served to all parties whose interests may be affected by the proceedings such as any registered owners, co-signers, 2nd mortgage holders etc. Lenders then request an Order Nisi from the court; this order when granted commences a time frame where the owners can pay out the mortgage and retain ownership of the real estate in question. This is called the redemption period and the Supreme Court of BC has consistently stated that the usual redemption period is 6 months and that shortening this period is a matter of sound judicial discretion. During this period, the owner may continue to live in the property and cannot be made to leave except in exceptional circumstances. Technically, the property can be sold during this period, but the foreclosed upon owners could still payout the mortgage and regain control of the property. Upon Expiry of the redemption period, lenders usually put the property up for sale with a Real Estate company via a Lawyer who is acting for the lenders. This is the time the property is made available to the public for a court ordered sale. Foreclosure sales have some very important cautions that all buyers need to know and understand. It is very important to have an REALTOR® that understands the process as it is different from your standard purchase. Foreclosure sales are generally on an “as is where is basis” and there is no guarantee as to condition on possession date, plus appliances and other chattels are not included. Oh, and there is no guarantee your offer will be the winning offer.
So, is a foreclosure sale right for you?

Either way you’re investing in your future. Paying down your mortgage helps reduce future interest costs, and builds home equity. Contributing to your RRSP or TFSA builds your savings through the power of tax-free compounding.

What solution is right for you … or should you do both? Let’s take a look at both sides of the equation.

Pay down your mortgage

Being mortgage-free as soon as possible may be a sound strategy for creating wealth. Contributing to your mortgage over and above your payment will help you be mortgage-free sooner. Any additional amount over your regular payment will go directly towards reducing the principal. The more you pay down now, the more interest costs you’ll save in the future.

If your mortgage interest rate is equal to or higher than the rate of return you expect to earn on your RRSP or TFSA, then reducing your mortgage can be a good choice. An important thing to recognize is that when you pay down your mortgage it guarantees you a rate of return equal to the mortgage rate. In this low interest rate environment, it’s not possible to earn a similar guaranteed rate in your RRSP or TFSA.

Saving through RRSP/TFSA contributions

Money invested in your RRSP compounds tax-free, earnings on TFSA contributions are tax exempt. In either case each can create a sizeable nest egg for you in retirement. Also, if you're not planning on retiring for a while, the compound interest you can earn is likely more advantageous than a paid-off mortgage.

If the expected rate of return in your RRSP or TFSA is higher than the interest rate on your mortgage, then contributing to an RRSP or TFSA makes sense, (eg. 9% in your RRSP vs. 3.99% on a mortgage). It’s important to recognize however that the rate of investment return is not guaranteed and higher returns come with a higher risk.

Do both

Another consideration is to do both and get the best of both worlds. For example, contribute to your RRSP each year, and use the tax refund to pay down your mortgage. Finding a balance between chipping away at your mortgage and saving for retirement is a form of diversification that could benefit you in the long run.

There are a number of online calculators available that can provide a quick comparison of your options. Check out the RRSP vs. Mortgage Calculatoror the Government of Canada's TFSA calculator.

The above is general information and is not intended to be financial advice, and may not be suitable for you. Before you make a decision, we recommend you consult with a qualified financial advisor about which strategy might be right for you.

This article is provided by First National Financial. For more information call 888.488.0794 or visit www.firstnational.ca.

Has a new job or a new direction necessitated your moving to Kelowna, British Columbia? Or perhaps you visited, fell in love with one of BC’s fastest growing yet laid-back communities and have decided to retire there. Whatever it is drawing you to Kelowna, you’ll best start the process of finding a Kelowna home by approaching a qualified Kelowna Real Estate agency. When it comes to Kelowna properties for sale, no one’s going to have their thumb on the pulse of the market quite like the friendly folks at Royal LePage Kelowna.

First and foremost, their realtors won’t aim to find you a house, condo, townhouse etc. – they’re goal is to find you a home, and the definition of what is an ideal home differs with every individual and every family. Being receptive to the particular needs and wishes of the client is of the utmost importance and a value every Royal LePage Kelowna realtor places front and center in their service. Anyone can evaluate any number of Kelowna homes for sale on their own. Where a quality realtor provides real value is in fine tuning your search by combining his or her market expertise with an understanding of what distinguishes you as a buyer. It starts with a lot of listening, is followed by a lot of hustle and ends with a satisfied homebuyer.

The consistency seen in the large numbers of quality Kelowna properties for sale is a testament to the way the city has grown and the attractiveness it has for people at different stages of their lives. Like any mid-sized city, folks come and go but those who are on their way in are sure to feel good about what Kelowna has to offer. It features a burgeoning economy with a growing high-tech sector and other similarly strong industries. In addition, there is a real quality of life in Kelowna that is buoyed by the ample opportunities available to one and all to enjoy its spectacular natural beauty.  Add to it all the fact that Kelowna homes for sale and their properties offer good value for your dollar and some might say it’s a slam dunk in favour of BC’s interior gem of a city.

Do yourself a favour and weigh the many Kelowna properties for sale with the help of one of the experts at Royal LePage Kelowna. They’ll narrow the field of Kelowna homes for sale that meet your criteria and streamline the process of getting you into the one that’s perfect for you. Visit http://kelownahomefinders.caand get the ball rolling.

Property Type:

20.7% by First Time Buyers
20.7% of purchases were by Move-Up Buyers
14.0% buying Revenue/Investment Property
13.2% moving from Single Family Home to Strata Unit
6.6% moving into Retirement Home/Seniors Community
4.1% Recreation Property Buyers
3.3% moving from Strata property to Single Family Home

It is interesting to note that first-time buyers and move-up buyers appear to be neck and neck this month!

Buyer Type (Family Dynamic):
28.0% Two parent family/children
23.2% Couple without children 
16.8% Empty Nesters/Retired
12.8% Single Female
9.6% Single Male
4.8% Single Parent with children

Moving From: 
64.8% from Within OMREB Board Area
19.2% from Alberta
9.6% from Lower Mainland/Vancouver Island
4.8% from Other Areas in BC
0.8% from Saskatchewan/Manitoba
0.8% from Eastern Canada/Maritimes
0% from Outside Canada
0% from NWT/Yukon (fifth month reported)