Last week I received a phone call from a client who is looking for her first home. We’ve already met to figure out how much house she should buy, keeping in mind her income and what would be a comfortable mortgage payment. She doesn’t have enough saved for a 20 percent down payment, so our plan was to save for about a year to reach that goal. But the client called to tell me she had found a great house that was a little bit out of her price range. In addition, the bank she is working with has qualified her for several loans that would enable her to borrow the full asking price of the house.

I can’t blame her for being excited. It’s easy for a prospective homebuyer to fall in love with a property (a cardinal sin in homebuying.) And while she hadn't saved nearly her full down payment, she was looking just to get a feel for what’s out there. But I can blame the bank for enticing her into being irresponsible. Borrowing 100 percent of the value of the house, as we’ve seen in the past two years, has gotten a lot of people into trouble. It often means larger loan payments than are affordable, leaving the homebuyer with no “wiggle room” in their budget. If income goes down it becomes difficult to cover expenses. In addition we’ve also seen many homeowners end up in the uncomfortable position of owning a mortgage that is bigger than the value of the house.

Have banks and mortgage lenders learned nothing in the past 2 years? Why are they still offering these types of packages? My client happens to be a doctor and makes a good income, but she still has a limit for a comfortable mortgage payment. And, while not likely, she could lose her job. She could also become disabled or sick and unable to work. In addition she’s a single woman and has no one to fall back on. My job is to teach her fiscal responsibility. Why aren’t banks doing the same thing, considering that it’s their money they are doling out? Do you have any ideas?