Question: I plan on buying my first home sometime this fall and want to begin the process the right way. I have a friend who works for a bank who pre-qualified me for a mortgage of up to $350,000. He told me the total monthly payment would be somewhere near $2,800.

I have been renting an apartment for ten years and now pay $1,700 per month. I am single and have an expensive lifestyle. I really don't want to owe $350,000 with a payment of $2,800 a month. I have heard that you should always get the largest mortgage possible, but this is making me nervous. I would appreciate any comments.

Answer I, too, have heard the "experts' say that it's financially wise to hold the highest affordable mortgage. You hear all the buzz words -- "low interest rates', "tax deductible', "real estate appreciation', etc. -- but the problem with this one-sided thinking is that everyone cannot possibly fit in the same mold.

Let's take a couple of hypothetical examples.

"George" is married with four children. He has a nine to five job and spends most of his free time at home.

"Maria," on the other hand, is single and lives in the city. She travels quite a bit and finds herself spending very little time at home. She has lots of friends, dines out frequently and has a fast-paced work and social schedule.

Both George and Maria earn similar salaries and have the same amount of debt. Should both George and Maria spend the same amount of money on their house and mortgage payment? Of course not.

George is a prime candidate for a larger mortgage payment. He needs a big house to accommodate his family and has very little outside expense. Maria spends very little time at home and her lifestyle is expensive. Maria's personal lifestyle does not require a large mortgage.

Here's the bottom line: You need to match your mortgage payment with your own particular objectives and lifestyle. There's never a right or wrong when it comes to borrowing money.

Do not, I repeat -- DO NOT -- take out an excessive mortgage simply because interest rates are low and you can get a tax deduction. These are all good things and I am a huge advocate of owning property as opposed to renting, but you need to determine what level of mortgage you can comfortably afford.

Don't let a lender tell you what this number is. Remember, the lender doesn't care if you can afford the mortgage -- it just wants you to make the payments.

The only thing you have to think about when determining your comfort level for a mortgage is the tax savings when compared to renting. If you're paying $1,700 per month in rent, an equivalent mortgage payment will be somewhere near $2,100, thanks to the interest and real estate tax deduction.

So as a starting point, consider a total mortgage payment of $2,100 or so. This will "buy" you a mortgage of about $275,000.

The important thing is to make sure that your housing budget fits into your particular lifestyle and financial situation.

Published: August 30, 2001

Use of this article without permission is a violation of federal copyright laws.

, the president of PMC Mortgage Corporation in Alexandria, VA, is a mortgage columnist whose work has appeared in numerous consumer, real estate, and mortgage publications. Mr. Savage welcomes your questions for possible use in this column, however because of the volume of mail received, Mr. Savage cannot answer questions individually.