You will need to determine how much of a down payment you can make, and what you can afford for a monthly payment.

For your down payment, it's not simply a function of how much you have saved. You will need to calculate your net worth by determining the difference between your total assets (what you own) and your total liabilities (what you owe). Your mortgage specialist will want this information and it will help them provide you with insight into how much down payment you can afford.

To determine what you can afford for a monthly payment, you’ll need to add up your non-discretionary monthly expenditures. This will help you see how much you can manage for mortgage payments, strata fees, insurance and property taxes. Your monthly mortgage payments shouldn't be more than 32% of your gross household monthly income. This is your Gross Debt Service Ratio. Your total monthly debt load shouldn't be more than 40% of your gross monthly income. This is your Total Debt Service ratio.

Your mortgage specialist will need supporting documents to prove your identity, income and liabilities. This will include your most recent Notice of Assessment from Revenue Canada, pay stubs and employment letters, as well as bank and credit statements.

After you know what you can afford, you can start shopping around. You’ll need to start by determining your priorities. For most people this starts with finding a balance between home style and location. The majority of us usually have to make some compromises when choosing a home.

If location is paramount, then you’ll need to determine what type of home you can afford in that location. If home style is more important than location, then you will be free to search a wider geographic area.

Once you have determined the areas you are going to search, you need to create a list of homes and communities to visit that fit your price range. For new homes, look for ads online or in the newspaper, because not all new homes are listed on “realtor.ca.” Visit the sales centres and display homes in all of the communities on your list, and make sure you ask all of the questions that are relevant to your situation. Try to imagine how your family will live in the home and enjoy the community. When comparing the homes, make a list of all the features and benefits, and rate each community. You can even go as far as weighting certain characteristics based on your own priorities. For example, outdoor living space may be more important to you than proximity to schools.

Finally, make sure you do some research on the builder. Find out what other communities they have built. If you know someone who lives in one of these communities ask them about their experience. Find out if the builder is a member of the Urban Development Institute and the Canadian Home Builder’s Association. Being a member of these associations, means the company has to abide by a code of ethics. When you buy a new home, it's important that the builder will be there to look after any concerns after you move in.

As a first time homebuyer you may withdraw up to $20,000 ($40,000 per couple) from your RRSP’s under the Home Buyers’ Plan. Take note that a first home means neither of you can have been a homeowner for the previous 4 years. In this case, only the person who has never been a home owner, will be allowed to withdraw from their RRSP. You can use this amount for your down payment and it is not subject to income tax. However, there are some conditions.

You have 15 years to pay back the amounts to your RRSP. When you pay back your RRSP there is no additional deduction. If you fail to make an RRSP payment the minimum re-payment amount will be added to your income.

For more information, you can visit the Revenue Canada website and download a PDF of the general rules.

HST is payable on new homes, which will vary from 3.20% to 12% of the purchase price. The variation is determined by the price of your new home, and when it was completed.

Homes under $350,000 completed before June 30, 2010

For homes under $350,00, the same rate of 3.2% that was applicable for GST prior to June 30, applies to homes completed before June 30, 2010. (There are 3 separate rebates – federal, provincial and provincial transitional rebates – which combine to bring the payable tax down to the previous level.

Homes over $350,000, and under $450,000 completed before June 30, 2010

The same sliding scale of 3.2% to 5% that was applicable for GST prior to June 30, applies to homes between $350,000 and $450,000. Homes priced between $450,000 and $525,000 will have to pay 5% HST. (These homes will qualify for the full transitional rebate.)

For homes completed after June 30, 2010, up to $525,000

These homes will be subject to 5.2% HST. However, if some of the costs were incurred prior to June 30, 2010, the homebuyer will qualify for a partial transitional rebate, which will range from 0 to 2%.

For homes completed after June 30, 2010, over $525,000

These homes will be subject to 12% HST. However, if some of the costs were incurred prior to June 30, 2010, the homebuyer will qualify for a partial transitional rebate, which will range from 0 to 2%.

The First Time Home Buyers' Program allows eligible purchasers to claim an exemption from the Property Transfer Tax if the fair market value of the home is less than $425,000. There is also a proportional exemption up to the $450,000 threshold. For other buyers, the fee is 1% on the first $200,000 and 2% on the balance.

When you buy a home in a strata title community, be sure to read the strata bylaws in the Disclosure Statement. Pets and rental restrictions are usually the most common questions people ask, but make sure there are no other surprises. Once a new strata council is formed consisting of the new homeowners, new bylaws can be passed or existing ones changed, but this can be a time consuming process.

For first time homebuyers, the additional costs of owning a home can come as quite a surprise. One of the first possible extras is mortgage insurance. If you pay less than 25% of the property’s value for your down payment, you’ll have to have the mortgage insured by CMHC. The rates vary based on the amount of your down payment, but they are usually between 3.10% and 0.5% of the mortgage amount.

Your lender may also require that the property be appraised at your expense. You may also want to make a Home Inspection a condition of your Offer to Purchase. These fees could add up to between $500 and $1,000.

Legal Fees and Disbursements must be paid upon closing and they’ll cost a minimum of $500. Other up-front costs may include Property Transfer Tax.

If you’re buying new, you may also include upgrades and customizing options. This will increase the price, but it can be amortized over the life of the mortgage.

After final completion, you’ll be facing ongoing payments such as annual property taxes, monthly strata fees, and property insurance. Because it is security for the mortgage, the lender will require that the home is insured.

Be sure to check the disclosure statement to see what is included in your strata fees. There should be a detailed description of what is covered, and a budget provided. The services and amenities will vary for every community.

As a general rule strata fees include maintenance of common property. Usually, this is everything outside your home, while things inside your home will be your responsibility. They will also cover insurance for common areas, landscaping of the grounds, garbage and snow removal, as well as amenities such as a spa, fitness centre or pool.

One of most difficult decisions it to determine the type of mortgage that best suits your needs. There are many different parametres available to suit individual needs, resources and preferences - fixed rate or variable rate, short term or long term, closed or open.

When considering a fixed versus a variable rate mortgage, whether the current interest rate rises or falls in the future is a key determining factor. If rates are low, it may be best to lock into a fixed rate mortgage. If rates are likely to fall, a variable rate mortgage would be better. In this case, your monthly payments would stay the same but the amount of principle you pay would increase. An adjustable rate mortgage will change the amount of your monthly payments based on market conditions. It's important to note that adjustable and variable are note the same thing.

Short-term mortgages are preferable if you think interest rates are likely to remain low or fall in a few years. Long-term mortgages are the better bet if you foresee interest rates rising over the long term. Long term mortgages are typically 3 or more years and usually have higher interest rates than shorter term mortgages.

Your third option is an open or closed mortgage. Open mortgages allow you the freedom to make prepayments and lump sum payments without penalties. Closed mortgages offer lower interest rates but have the disadvantage of not allowing you to contribute extra money over and above your regular monthly payments.

Make sure to ask a mortgage specialist to thoroughly explain all of your options, and give you a clear idea of the pros and cons of each. If you're not satisfied with the answers, it never hurts to get a second opinion.

Mortgage payments only commence on the completion of the sale, and only start after you have taken possession. (The start date may be a month after you have taken possession, but this may vary depending on how you have structured your mortgage.)

You do not have to make payments immediately after you pay the deposit. This is a good thing if you are buying in a pre-construction phase, which can take months to complete. This also allows you to buy a new home and purchase customizing options as part of your mortgage, without having to make mortgage payments until after the sale is complete.