Take the first step by outlining your financial situation. List all of your sources of income. Remember to add savings, RRSPs and other available sources of funds. Make a note of whether or not you would be able to borrow from friends or family in the event of a shortfall. Then, list all of your monthly and annual expenses. Be sure to include all debt, and any outstanding credit card balances.

Your next step is to make an appointment with your banker or financial advisor to get a pre-approved mortgage. Its important to speak with a professional at this stage so you know how much you can realistically spend. It will eliminate any disappointment if you fall in love with a house that is out of your budget.

A pre-approved mortgage is preliminary approval by a lender for a mortgage up to a certain amount, usually with a guaranteed rate for a specified number of days. Pre-qualifying for a mortgage is free and easy. To get the best deal, you should get quotes from several different lenders. You do not have to choose a lender until after you have finalized a deal with your homebuilder. Only then will the mortgage amount, interest rate, and terms be binding.

Don’t forget to ask about mortgage insurance, taxes, interest adjustments, and property taxes. In some cases, these items can total as much as three percent of the final cost.

APRIL 19, 2010: For more information on CHMC (Canada Mortgage and Housing Corporation) product changes and new government guarantees for mortgage loan insurance, please visit CMHC's information web page.

For quick reference most major banks have a mortgage calculator on their website.

Click here for the Royal Bank’s mortgage calculator.