The two major components are the Mortgage and the Down Payment

Mortgage
For the mortgage, the first step is to contact your lending institution to obtain the maximum amount you can be pre-approved for. This will help you determine the price of home you can afford. Some people are surprised to find they can afford more than they expected. While others are disappointed to discover they cannot get enough of a mortgage to afford the home they wish to purchase. Therefore, this is a very important step. Of course, if you would like help in finding a lending institution, please do not hesitate to ask Michael.

You can begin by simply calling your lending institution and explain your situation. From there, the mortgage broker will discuss with you the different kinds of mortgages (See Types of Mortgages) available to you. Plus, the mortgage broker will instruct you about which documents will be required, and what you will have to do next.

At your lending institution you will of course fill out an application form stating your income, assets, liabilities, etc. The documentation you will be required to provide:

1) Income Confirmation: usually a letter from your employer and a pay stub with year-to-date figures
2) Written Confirmation of your down payment: usually a bank statement showing the source of funds or a statement of investments for stocks, bonds, etc.

Remember to ask for a commitment letter with all the details of your pre-approval. Besides the pre-approved amount, the expiry date on your pre-approval is very important. See the Key Elements of an Offer section for more information.

Down Payment
You will also discuss the down payment with your lending institution. The sources of your down payment can come from many different sources. Eg. Savings, Investments, Inheritance, RRSPs, etc. See Using RRSP's for the Down Payment for an explanation of withdrawing RRSPs for the down payment.

If you would like to calculate an estimate of what you can afford, see What Can I Afford.