You can contact financial institutions such as banks and credit unions directly, or you can work with a mortgage broker. A broker will help you find a lender and the best mortgage package.

Pre-approval of a mortgage is when your lender has reviewed your financial information and determined the maximum amount you can borrow. The advantages include, you:

• know how much you can borrow, so you don't waste time looking at properties you can't afford;
• don't have to worry about rising interest rates while shopping for a home, since the mortgage broker will typically guarantee the current interest rate for up to 120 days;
• have an edge when you make an offer, because the seller knows you're more likely to get a loan; and
• save time when you apply for your loan because you've already assembled your paperwork.

Financial institutions are competing for your business so it pays to compare rates when you’re looking for a mortgage. Lenders may (although not always) reduce their posted interest rate so be prepared to ask and bargain, especially if you’re already doing business with the institution. 

Once you have selected your lender, you will need to provide your financial information. Your lender will want the following:

• Personal information such as number of dependents and marital status
• Details of employment, including a letter from your employer verifying your salary
• Banking and investment information
• Details of your assets (i.e.- a car, other property)
• Information on loans and other liabilities
• Permission to do a credit check

After your application is complete, you will know how much you can borrow and you will be ready to start searching for a home.

Whether you're a first-time buyer or you've decided to refinance your home, consider the following money-saving steps when calculating your mortgage payments:

• By shortening your loan repayment or amortization period to 20 years from 25 years, you'll pay your mortgage off five years sooner. You'll pay higher monthly payments, but you'll build equity faster and you'll pay less in interest over the long term.
• Apply for a prepayment option. If you receive one, you can directly pay down some of your principal before it's due. Make sure to check for prepayment penalties.
• By paying biweekly instead of monthly, you'll make 26 payments in a year or 13 months instead of just 12 months and reduce your amortization to about 20 years from 25 years.
• Mortgage calculator

Example:

Note: Five-year contract mortgage rate 5.75%. Stress test is greater of 5.25% or contract rate plus 2% or 7.75%.