When my husband and I were house hunting several years ago, we were shocked at what some lenders were willing to “give” us in terms of a mortgage. This was before the housing market crash and financial crisis, in the heady days of “anything goes.”

Now that the financial crisis is fading from memory, some lenders are starting to approve bigger mortgages. As a buyer, it’s tempting to get as much house as possible, without thinking about the impact on your budget.

In our case, we ended up buying something for much less than we were approved for. Even though we were tempted to just go for the bigger house (with the bigger mortgage), cooler heads prevailed.

Before you agree to a mortgage that could cause financial problems for you down the road, pay attention to the following red flags. Remember: Just because you are approved for a high mortgage amount, it doesn’t mean you can actually afford it.

You Will Have to Stretch to Make Payments

Run the numbers related to your monthly payments. Will you have to stretch to make the payments? If you run the numbers and end up saying something like, “It will be close, but we can make it work,” that’s a sign that the mortgage is probably too much for you to afford.

An affordable mortgage is one with payments that you can make comfortably, without looking for ways to stretch your budget to make it happen.

One Financial Setback Puts You in Danger of Missing Payments

Are you worried about what could happen if you have a financial setback? Would one financial setback mean that you would be in danger of missing a mortgage payment? Think about how you would pay your mortgage if your hours at work were cut, or if you were unable to work because of a medical problem.

Even more telling is if you are concerned about what might happen if the car breaks down and you need to pay for repairs. Think about what you would do in these scenarios. If your budget is so tight that your mortgage payment would be in danger with a financial setback, reconsider the mortgage size.

You should be comfortable making mortgage payments in a crisis situation, at least for a couple of months, so that you can get back on your feet.

“Creative Financing” is Needed for You to “Afford” the Mortgage

One of the biggest red flags is that you need some sort of special financing in order to “afford” the house. If your lender is talking about a super-low initial rate (that will go up later), or if you need to start out with an interest-only loan, that is a sign that you can’t really afford the mortgage. Don’t fall for the idea that by the time your payments change you’ll be making more, so you can afford the higher payment. Don’t buy unless you can truly afford the higher payment right now.