Further to discussing advantages and disadvantages of a reverse mortgage with a counselor, you also need to understand that there are certain costs involved in reverse mortgage process. Costs may include application fees, closing costs, insurance, appraisal fees, credit report fees, and quite possibly a monthly service fee. Remember too that since a reverse mortgage allows you to continue living in your home, you’re still responsible for property taxes, insurance and repairs. If these payments are not maintained, loan could become due in full.

A reverse mortgage may also affect eligibility for federal or state assistance as well as Medicaid. That said, any reverse mortgage money that is received is tax-free and does not affect Social Security or Medicare benefits.

The condition of your home is also a large part of approval process. It must be structurally sound and in good repair. If it’s determined that home repairs need to be done, costs can also be financed through reverse mortgage loan.

The total amount a homeowner can borrow all depends on kind of reverse mortgage selected, how much equity is in home, loan's interest rate and most importantly, age of borrower. Typically older a person is, more they can expect to receive.

A borrower can receive reverse mortgage payments in one of following ways: in a lump-sum payment; fixed monthly payments; a line of credit or a combination of any of above. Most homeowners go for line of credit option which allows them to draw on loan whenever money is required.

Current account mortgages work by turning your mortgage into a large overdraft. They allow you to set off all savings you have against all debts you that owe. You combine all your debts with all of your income in a single current account. So every time your salary is paid in, you reduce amount of 'overdraft'. Every time you take money out, overdraft increases. This means you can overpay and underpay without being penalised for it.

The more savings and income you have in your account, less interest you will pay overall. Since interest is calculated on a daily basis, you will immediately benefit from any overpayments you make.

At any time you can borrow back some or all of money you have managed to overpay on your mortgage. These mortgages are ideal for those who are paid regular bonuses so consequently can reduce mortgage balance quickly.

The good thing about current account mortgages is that interest charges on all your borrowings are at a cheaper, variable rate for mortgages instead of more common credit card rates. To compensate for this, rates on current account mortgages, tend to be slightly higher than standard mortgages.

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