in the end it comes down to how much of a financial risk are you willing to take with your house.
When my wife and I purchased our home 3 years ago, our lender was approving us for up to a 600K loan. However, we didn't borrow that much. We borrowed only 400K and found a decent home we could be happy in and enjoy. Sure we could have maxed out at 600K, but the mortgage would've been a bit high..
After all, they are other things to enjoy than working to pay the mortgage every month... other things like spending $ on the p-car.
We stuck to rule that our mortgage should not be more than 33% of our annual income. This rule used to work. These days it seems people have borrowed and pay 40%, 50%, or more of their income... this is too risky. so most of their money is going to pay for their house. and most of the money is interest.. sad to have your hands tied up like that. but nobody forced you to sign on the dotted line.