Jargon Buster

Adviser: There are different kinds of advisers who can make recommendations on financial products. Independent financial advisers, who can provide advice on financial products from any lender in the market to offer you the most suitable and competitive product, or, advisers who are restricted to providing advice about products from one lender or a panel of lenders.
Annuity: An annuity is a plan that guarantees a series of payments in exchange for a cash lump sum. The income you will receive will depend on prevailing annuity rates and your age and sex at the outset.
Compound interest: Some lifetime mortgages have compound interest added, which means that any interest accrued is added to the loan amount and then future interest is charged on top (interest paid on interest).
Consultation: A meeting with your personal independent adviser from The Equity Release Bureau to determine whether equity release would be suitable for you and how much cash you could release. Our initial consultations are free of charge and without obligation so why not reserve your consultation now or call us on FREEPHONE 0800 988 1289.
Deposit accounts: Deposit accounts provide you with the opportunity to earn more interest on your money/savings than an everyday current account. There is a wide variety of deposit accounts available and providers can offer accounts which can be accessed immediately or those which have a notice periods of 30, 60 or 90 days. Deposit accounts are usually used as a place to store an emergency fund.
Drawdown lifetime mortgage: Essentially the same as a conventional lifetime mortgage but allows you to draw down cash in stages when you require it. The Equity Release Bureau are able to offer you a wide range of drawdown lifetime mortgages.
Early repayment charge: An early repayment charge is a fee charged by some providers of lifetime mortgages if you decided to pay the loan back early. As the name suggests, lifetime mortgages are designed to last for the rest of your life and are not expected to be repaid until your death.
Equity: Equity is the value of your home minus any outstanding mortgage.
Equity release: An equity release plan allows you to release tax-free cash from your home in the form of a cash lump sum or regular income, with no monthly repayments to make.
Estate: Your estate is the name for everything that you own, including your home, possessions and any savings or investments.
Exclusive offers: The Equity Release Bureau are able to offer you special offers which would not be available to you if you were to approach the plan providers directly.
Fixed rate: Some lifetime mortgages have fixed rates, which means that the interest rate on the plan will never change throughout it's term no matter what happens to Bank of England base rates.
FSA: Stands for Financial Services Authority, the body which is responsible for regulating advice and the sales of equity release plans. Their aim is to promote efficient and fair markets, and to ensure that consumers are treated fairly.
Independent financial adviser: An independent financial adviser is independent of any provider and so can search the whole market to recommend the most suitable and competitive plan for your individual circumstances. They must offer you the choice to pay by fee and return the commission from the plan provider to you. If they do not offer this option, then they cannot be independent.
Inheritance: This is the value of your estate that will be left to your heirs upon your death. From April 2007 40% inheritance tax applies to the value of your estate that exceeds £300,000.
Interest: Charges which are added to a lifetime mortgage, either monthly or annually depending on the individual plan.
Lifetime lease: When releasing cash from your home with a home reversion plan, you are given a lifetime lease which allows you to stay in your home rent free for the rest of your life.
Lifetime mortgage: A loan secured on your home. No monthly repayments are made on the loan until the death of the last surviving partner or their entry into long term care. The Equity Release Bureau can offer a wide choice of lifetime mortgages to provide you with a cash lump sum or regular income or, a combination of both. Call us on 0800 988 1289 for more information or to arrange a free, no-obligation initial consultation.
Monthly repayments: Monthly repayments apply to conventional mortgages, which have to be repaid over a period of years. Equity release plans however do not require any monthly repayments as they are repaid upon the final sale of the house.
No-negative equity guarantee: This guarantee comes with all SHIP (Safe Home Income Plans) approved plans and ensures that no matter what happens to property values in the future, you will never owe more than the value of your property.
Personalised illustration: A personal illustration sets out the details of your recommended plan, and helps you to understand the features and risks. The Equity Release Bureau provide a personalised illustration for all plans after assessing your individual needs.
Purchased Life Annuities: Purchased Life Annuities are plans which can provide you with a guaranteed income for life. In return for a lump sum a company can provide you with a level or increasing income for the rest of your life. You can also opt to include a guarantee period on your plan which would mean that the income payable would continue to be paid to your estate if you died. You can also opt for a capital guarantee which means that the balance of the money used to purchase the plan is returned to your estate and beneficiaries if it has not been paid out as income. A non-tax payer can benefit for special tax treatment which means the income can be paid without tax being deducted. You can choose to have the annuity paid to you on a monthly, quarterly, half-yearly or annual basis to suit.
Reversion plan: Part or all of your home is sold to a reversion company in exchange for a cash lump sum and lifetime lease which gives you the right to remain in your home for life. The Equity Release Bureau are able to offer you a wide choice of home reversion plans. Call us free on 0800 988 1289 for more information or to arrange a free, no obligation initial consultation.
SHIP: Stands for Safe Home Income Plans, an organisation dedicated entirely to the protection of planholders and promotion of safe home income and equity release plans. Membership is voluntary but companies who are members of SHIP follow a code of conduct to ensure customer safety. The Equity Release Bureau is the only independent financial adviser firm who is a member of SHIP.
Solicitor: A solicitor will handle all of the legal work involved when releasing cash from your home. Click here to find out more about solicitors and how they are involved in releasing cash from your home.
State benefits: State benefits such as pension credit could be affected if you release cash from your home. Your personal adviser or the Department of Work and Pensions will be able to help you to find out whether they would be affected.
Survey: A survey is an inspection of your property which tells the product provider how much your property is worth, and its condition.
Top ups: If you have released cash from your home already it is possible to apply for a 'top up' which lets you release more cash. The ability to release more cash from your home is not usually guaranteed.
Variable rates: Some lifetime mortgages have variable rates of interest which means that the interest rate applied will fluctuate depending on the Bank of England base rate or the Retail Prices Index (RPI). So when the base rate or RPI goes up, your plan's interest rate will increase, and when the base rate or RPI goes down your plan's interest rate will decrease.
Will: A Will is a legal document which sets out who you would like to leave your estate to upon your death.

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