Sub prime is a buzzword at the moment, and the way things are going it will soon earn an entry into the Oxford dictionary.

The meaning could be twofold: (n.) loans given with little or no security from the borrower, or (adj.) the description given to an economy suffering from poor management and slack lending standards.

Sub-prime the adjective is headlining the business pages at the moment.

It was used by BBC recently when reporting another write-down by Swiss financial group UBS.

UBS also announced that the chairman Marcel Ospel has stepped down in light of these latest write-offs.

There are financial companies out there with falling stock prices due to the “sub-prime crisis”, but have strong management and well-maintained balance sheets.

These companies will be the market darlings after the dust settles and the crisis is over.

But, now could be the right time to re-enter the market and pick up some of the stock on the cheap.

A word of warning however, it is important for any investor to do their homework, ask questions and make educated decisions.

Analysts and investors are concerned that, despite financial institutions writing off billions of pounds in the last quarter 2007 and this latest quarter, there is still billions unaccounted for as more borrowers struggle with their loans.

There may be a few more big institutions to fall yet, but you can be sure there are many companies out there with the right checks and balances in place to weather the storm.

The most popular reasons for signing up to equity release plans are funding home improvements and treats such as exotic holidays.

The next most frequent motives are the need to pay for a divorce or buy out an ex-partner, according to new research from financial services firm Saga.

Equity release, which allows the over 60s to access the cash tied up in their homes, is becoming increasingly popular.

But whatever the reason for taking out a plan, it is not something that should be done lightly.

This type of loan should always be considered as a last resort, when all other options have been ruled out.

Yes, it allows you to get hold of cash at a time when you need it…

And it may seem very appealing because there are no repayments to be made until you sell up or die.

But that doesn’t mean equity release is good value.

In fact, the costs are far higher than most people realise.

Depending on the plan you choose, you’ll be charged interest, which rolls up – incurring interest on the interest – until it is repaid.

The other possibility is that you – or your heirs – will be expected to hand over a sizeable percentage of your home’s eventual sale price.

Either way, you, or they, can expect to repay several times more than you originally borrowed.

So before you opt for equity release, think hard about what you want the money for – and whether it really is worth it.