United exceeds 100%

United Home Loans general manager Robert Redford says his firm has already been offering 101% loans for about a year with the extra percentage point paying for its 1% application fee.

Now it’s extending the scheme so that all fees and expenses, including the lenders’ mortgage insurance premium, are covered by the loan.

However, ordinary old Joe Blow needn’t apply. Redford says this loan is tightly targeted at young professionals with high existing incomes, secure employment and the potential to increase their earnings.

They also have to have "a squeaky clean" credit history – any adverse events on their credit record would bar someone from having such a loan approved, Redford says.

The loans are only available in major cities and only on existing houses – they aren’t available to buy homes in new subdivisions. United, which is part of Eric Watson’s Hanover Group, itself provides 90% of the loan value with first mortgage security, and sister company in the group, FAI Finance, funds the other 12.5% with second mortgage security.

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