When my husband and I started shopping for our first home, we were quickly disheartened. At the time we lived in Vancouver, British Columbia, and knew we'd have to pay dearly to settle down in Canada's most expensive city. With average home prices in Vancouver ringing in at over $700,000 and the national average hitting $344,500 last year, many first time home buyers are challenged in finding a way to afford a new home. Follow these five smart rules for home ownership, and you may just find a place you can comfortably afford.

1. Have very little, or no debt.

If you're still paying off your student loan, buried in credit card debt, or are wheeling around town in a leased car, it makes good financial sense to deal with your current debt load before signing up for a mortgage. Houses have costs that go beyond monthly mortgage payments, such as utilities, insurance, maintenance, and repairs. Dealing with old debt while jugging a myriad of housing costs could be a stretch to any budget.

2. Have a decent down payment.

Scraping together a sizable down payment is a challenge for many prospective homeowners, and an especially daunting task for those living in pricey cities like Vancouver, Toronto, and Calgary. But the advantages to saving more are you'll have to borrow less, and you'll also cut your interest and mortgage loan insurance costs. Moving into your new home with more than 20 per cent down saves you from having a high-ratio mortgage -- greater equity in your home may also help you sleep better at night.

See 5 Ways to get mortgage-free faster and New Mortgage Rules: Can you still afford a house? for more housing tips and tricks.

3. Don't fall in love. Stick to your numbers.

The cute condo with an ocean view was a stunning sight to see, and I couldn't help but love the amenities that came with the half-million dollar Vancouver property. Walking into that open house was a rookie mistake, especially since I knew the place was way out of my budget. It's a good thing I crunched the numbers and knew what I could afford before falling head-over-heels for that pricey place.

Every first time buyer or seasoned house hunter should do the math before getting carried away with costs. A too-high mortgage can leave you resorting to credit cards and lines of credit to pay everyday expenses — a downward spiral that could cost you thousands in interest. Try the CMHC's Household Questionnaire to see if you're financially ready.

4. The Home Buyers' Plan may help.

Under the Home Buyers' Plan (HBP), a first-time home buyer can withdraw up to $25,000 tax-free from their RRSP to buy or build a home. If you are purchasing the home with a spouse, you can both withdraw up to $25,000 from each of your RRSP accounts. See Should you use your RRSP to buy a home? for the rules.

5. Move to a less expensive city, or province.

The truth is a harsh reality, but some cities may be too pricey for many prospective first time house hunters to afford. If you're up for a job change and a little adventure, moving from Toronto to Hamilton could save you $109,000 on the average cost of a house. Relocating from Vancouver B.C. to Fredericton N.B. saves you a whopping $558,130 since the average home costs a more manageable $142,640 in the frugal maritime province.

Your Turn: Is home ownership out of reach for today's first time buyers?