As you guys are first time homebuyers my advice is that you should definitely NOT max out your purchasing power. As a first time buyer you will most likely be buying another home down the line. Take a long view of the purchase, buy a home you love but that you can also afford. Your home purchase should not stress you out. You should have AT LEAST 6 months cash on the sidelines in case of an emergency. As plentiful as things may be it is blinding how fast large companies implement cost cutting measures when they need to. When that happens layoffs occur. I am not trying to be overly pessimistic but I am just advising you to play it safe and keep an eye on the big picture. By a home you love, by a home that is affordable and will not eat up every penny you have. Buy something that will allow you to continue to fund 401ks, enjoy life and continue to save money and get to work on building or adding to your cash pile. Who knows you may be able to save enough such that in many years down the road, you will not need to sell your home, you can convert it to a rental and buy the next one.
I just would not try to shoot the moon on the first purchase. Also as you know there is no rush right now and Mira Mesa will continue to decline. (assuming MM is where you want to buy at)
