Topic 12 - Suitability Flashcards

1
Q

Why considering risk is important ?

A
  • risk to the home
  • Negative equity
  • repayment risk
  • interest rate risk
  • fixed rate risk
  • rate rises at the end
  • underperformance of investment vehicle
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2
Q

Unacceptable repayment strategies

A
  • Using the mortgaged property as means to sell to repay the mortgage
  • Using an uncertain inheritance to repay
  • Selling the main property you live in to pay unless its enough to pay and buy a new property
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