Pm595 Risk Paper: Buying a Home

1455 words 6 pages
PM595 RISK PAPER # 1

I/ TITLE: BUYING A NEW HOME

TABLE OF CONTENTS

INTRODUCTION………………………………………………………………………………. 3
RISKS IDENTIFICATION …………………………………………………………………….. 3
RISKS RANKING MATRIX ………...……………………………………………………… 5
RISKS MONITORING ……………….……………………………………………………… 6
CONCLUSION………………………………………………………………………………… 7
REFERENCES………………………………………………………………………………… 7

I/ INTRODUCTION
In this paper, I will discuss about a project that many people are familiar to: buying a new house.
Few years ago, I moved to a new area and was trying to decide whether or not to purchase a new house, and if so, where should I buy it.
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Fix the interest rate for the whole term of the mortgage.
3 Get caught in negative equity trap. Don't sell the property and realize a loss. Rent it out. Wait for the recovery and then sell. It never recovers and I have to sell. Take out a smaller unsecured loan to cover the different between the selling price and mortgage balance.
4 Have to move out of the area due to a change of job. Buy a property that can be easily let out and the rent covers the mortgage payment comfortably. The tenant does not pay the rent. Take out landlord insurance that covers the loss of rent due to tenant default.
5 Major repair becomes due and can't afford to carry out works. Take out a thorough and comprehensive buildings and contents insurance. The policy doesn't capture every eventuality, Take out specific policies for specific items
6 Buy a home I can't sell. Avoid difficult to sell home that is difficult to get a mortgage on. Still can't sell it! Buy a home near a city, train station or major road junction.
7 Can't pay the mortgage as it falls due, due to the irregularity of my income. Get a flexible mortgage where I can overpay on the mortgage and take payment holidays. Still can't afford to pay the mortgage. Get an overdraft facility or pay the mortgage with my credit card and pay back when able to do so.

IV/ CONCLUSION
During the process of buying the new house, new risks will be identified out of planning

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