Pros and Cons of Reverse Mortgages in CO

The Basics

Homeowners age 62 and up in the state of Colorado may qualify for a reverse mortgage, which is a type of loan that is accessed from the equity in the home. But while most traditional loan arrangements require the borrower to make payments to their lender each month, the roles are “reversed” in that the lender makes payments to the borrower for the term of the arrangement instead. The borrower need not worry about reimbursing the money, the loan is repaid when the home of the borrower is sold or the individual leaves the premises for any reason. No payments are due or expected until that time, however, all standard costs of typical ownership must still be paid out, including property taxes, homeowners insurance, and applicable HOA fees.
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The Pros of a Reverse Mortgage in CO

Like any major financial decision, there are valid pros and cons to be weighed before you get into a reverse mortgage. These are some of the reasons you should consider applying for this type of loan.

  • It’s a reliable income source that many retired seniors may choose to take on because they can receive their funds in one payment or multiple distributions just like a paycheck.
  • You can take this cash from your home without it affecting other sources of income such as Social Security or Medicare payments you might be getting.
  • A reverse mortgage may be the smart alternative to downsizing your current living situation. Some seniors even take the money they receive and put it towards the purchase of a new home.
  • The money you receive is typically tax-free but your situation may be somewhat different. You might want to speak to a tax professional about this topic before you commit.
  • You will never be expected to pay back more than the house is worth. This is due to a “nonrecourse” paragraph in your agreement that states you will not be responsible for reimbursements exceeding the current value of the home at the time the loan is expected to be paid off and the home sold.

The Cons of a Reverse Mortgage for Colorado Seniors

Here are some of the downsides to getting into a reverse mortgage:

  • The house is no longer yours nor can you hand it down to any heirs unless you repay the loan in full. Without reimbursements, the home becomes the property of someone else and your children or other relatives will have no claim to the house.
  • Your equity may run out before you pass away. Many seniors select a reverse mortgage because it’s a safety net option for getting access to a significant amount of money while allowing the borrower to stay in their own home for the remainder of their lifetime.
  • The majority of reverse mortgages come with adjustable rates, which could have an impact on the cost of the loan over the length of the term.
  • If you are not living in the home for any reason whatsoever over the continuous year, you will be considered as having moved out and the loan is then due for reimbursement. So if you or another borrower living in the home experience health issues that would initiate a move to a health facility for an extended period of time or in the event that you pass away, it could cause issues for the surviving borrower. Widows and widowers are exempt from this aspect of the arrangement.

Biggest CO Reverse Mortgage Lenders

All Time

Lender Loans Total Principal Limit
WELLS FARGO 4,542 963,445,060
AMERICAN ADVISORS GROUP 3,971 1,543,123,702
UNIVERSAL LENDING CORPORATION 2,774 849,639,063
FINANCIAL FREEDOM SENIOR FUNDING CORP 1,934 355,643,247
APPROVAL FIRST HOME LOANS INC. 1,337 497,124,155
FAIRWAY INDEPENDENT MORTGAGE CORPORATION 1,313 571,428,006
WENDOVER FINANCIAL SERVICES CORP 1,192 119,637,250
CHERRY CREEK MORTGAGE CO INC 1,037 343,526,533
FINANCE OF AMERICA REVERSE LLC 1,010 355,518,825
REVERSE MORTGAGE FUNDING LLC 902 435,811,808
ONE REVERSE MORTGAGE LLC 755 226,343,312
ALLIANCE GUARANTY MORTGAGE CORP 650 138,077,465
SILVER LEAF MORTGAGE INC 643 271,812,380
MOUNTAIN PACIFIC MORTGAGE CO 536 108,704,039
SYNERGY ONE LENDING INC. 449 170,012,720
AMERICAN LIBERTY MORTGAGE INC 425 177,189,030
PROVIDENT LENDING CORPORATION 424 117,957,309
MUTUAL OF OMAHA MORTGAGE INC. 424 220,814,936
MAC5 MORTGAGE INC. 406 156,254,495
LIBERTY HOME EQUITY SOLUTIONS INC 389 130,116,150

Since 2012

Lender Loans Total Principal Limit
AMERICAN ADVISORS GROUP 3,783 1,497,143,232
UNIVERSAL LENDING CORPORATION 1,250 487,784,338
FAIRWAY INDEPENDENT MORTGAGE CORPORATION 1,237 556,619,741
APPROVAL FIRST HOME LOANS INC. 1,217 465,044,655
REVERSE MORTGAGE FUNDING LLC 902 435,811,808
SILVER LEAF MORTGAGE INC 643 271,812,380
ONE REVERSE MORTGAGE LLC 636 198,975,152
CHERRY CREEK MORTGAGE CO INC 587 219,550,769
FINANCE OF AMERICA REVERSE LLC 584 259,614,986
SYNERGY ONE LENDING INC. 449 170,012,720

Want to learn more? Click here to get free information about a reverse mortgage!

Colorado Average HECM Interest Rates

Current Rates

Date Fixed Rate Adjustable Rate
2019-01-01 4.88% 4.88%
2019-02-01 4.90% 4.96%
2019-03-01 4.80% 4.81%
2019-04-01 4.85% 4.75%
2019-05-01 4.62% 4.54%
2019-06-01 4.57% 4.52%
2019-07-01 4.49% 4.36%
2019-08-01 4.53% 4.11%
2019-09-01 4.68% 3.98%
2019-10-01 4.45% 3.98%
2019-11-01 4.29% 3.95%
2019-12-01 NA 3.93%
2020-01-01 4.43% 3.83%
2020-02-01 4.40% 3.86%
2020-03-01 4.59% 3.81%
2020-04-01 4.87% 3.44%
2020-05-01 3.50% 3.22%
2020-06-01 3.56% 3.05%
2020-07-01 3.45% 3.02%
2020-08-01 3.65% 2.91%
2020-09-01 3.38% 2.92%
2020-10-01 3.51% 2.86%
2020-11-01 3.29% 2.81%
2020-12-01 3.33% 2.73%
2021-01-01 3.00% 2.67%
2021-02-01 3.28% 2.60%
2021-03-01 3.24% 2.50%
2021-04-01 3.23% 2.39%
2021-05-01 3.31% 2.29%
2021-06-01 3.42% 2.15%
2021-07-01 3.30% 2.12%
2021-08-01 3.36% 2.10%
2021-09-01 3.28% 2.14%
2021-10-01 3.38% 2.07%
2021-11-01 3.37% 2.13%
2021-12-01 3.43% 2.21%
2022-01-01 3.41% 2.23%
2022-02-01 3.51% 2.39%
2022-03-01 3.39% 2.70%
2022-05-01 3.42% 3.67%
2022-04-01 3.51% 3.07%
2022-06-01 4.43% 3.98%
2022-07-01 4.85% 4.40%
2022-08-01 5.93% 5.06%
2022-09-01 5.70% 5.47%
2022-10-01 5.63% 5.87%
2022-11-01 5.68% 6.38%

Historic Rates

Date Fixed Rate Adjustable Rate
2016-01-01 4.98% 3.60%
2016-02-01 4.83% 3.74%
2016-03-01 4.87% 3.78%
2016-04-01 4.99% 3.92%
2016-05-01 4.99% 4.05%
2016-06-01 4.92% 4.06%
2016-07-01 4.87% 4.11%
2016-08-01 4.78% 4.20%
2016-09-01 4.88% 4.44%
2016-10-01 4.91% 4.53%
2016-11-01 4.85% 4.60%
2016-12-01 4.86% 4.62%
2017-01-01 4.87% 4.66%
2017-02-01 4.97% 4.72%
2017-03-01 4.96% 4.59%
2017-04-01 4.98% 4.50%
2017-05-01 4.96% 4.46%
2017-06-01 5.01% 4.43%
2017-07-01 5.02% 4.42%
2017-08-01 4.97% 4.49%
2017-09-01 5.05% 4.47%
2017-10-01 4.99% 4.49%
2017-11-01 5.00% 4.57%
2017-12-01 4.90% 4.60%
2018-01-01 4.92% 4.63%
2018-02-01 4.85% 4.66%
2018-03-01 4.66% 4.60%
2018-04-01 4.89% 4.73%
2018-05-01 4.66% 4.69%
2018-06-01 4.76% 4.77%
2018-07-01 4.66% 4.72%
2018-08-01 4.61% 4.76%
2018-09-01 4.67% 4.74%
2018-10-01 4.57% 4.73%
2018-11-01 4.68% 4.79%
2018-12-01 4.59% 4.89%

Top Cities in Colorado by Total HECM Loans Originated

Rank City Zip Total
1 DENVER 80219 675
2 AURORA 80014 660
3 DENVER 80207 636
4 ARVADA 80004 550
5 ARVADA 80003 534
6 GREELEY 80634 522
7 LOVELAND 80538 517
8 DENVER 80221 507
9 LITTLETON 80123 495
10 DENVER 80205 472
11 LONGMONT 80501 471
12 LOVELAND 80537 466
13 LAKEWOOD 80226 460
14 LITTLETON 80127 434
15 AURORA 80013 426
16 DENVER 80211 412
17 BROOMFIELD 80020 409
18 WHEAT RIDGE 80033 396
19 DENVER 80210 382
20 LITTLETON 80128 379
21 LITTLETON 80120 373
22 GOLDEN 80401 373
23 WESTMINSTER 80031 367
24 CENTENNIAL 80122 360
25 ENGLEWOOD 80110 356
26 AURORA 80012 356
27 COMMERCE CITY 80022 351
28 GRAND JUNCTION 81504 342
29 LAKEWOOD 80232 335
30 ARVADA 80005 330

Housing Counselors in CO

BOULDER COUNTY HOUSING AUTHORITY
PO BOX 471, BOULDER CO 80306-0471
(720) 564-2279
http://www.bouldercountyhc.org

BROTHERS REDEVELOPMENT, INC.
2250 EATON ST, EDGEWATER CO 80214-1276
(303) 202-6340

CITY OF AURORA COMMUNITY DEVELOPMENT DIVISION
9898 E COLFAX AVE, AURORA CO 80010-5012
(303) 739-7914
http://auroragov.org

COLORADO HOUSING AND FINANCE AUTHORITY
1981 BLAKE ST., DENVER CO 80202-1229
(303) 297-7428

DOUGLAS COUNTY HOUSING PARTNERSHIP
9350 HERITAGE HILLS CIRCLE, LONE TREE CO 80124-5518
(303) 784-7857
www.douglascountyhousingpartnership.org

GRAND JUNCTION HOUSING AUTHORITY
8 FORESIGHT CIR, GRAND JUNCTION CO 81505-1014
(970) 208-9525
http://www.gjha.org/

GREENPATH FINANCIAL WELLNESS
424 PINE ST SUITE 202, FORT COLLINS CO 80524-2421
(888) 860-4167
http://www.greenpath.com

HOUSING SOLUTIONS FOR THE SOUTHWEST
295 GIRARD ST, DURANGO CO 81303-6828
(970) 259-1086
www.swhousingsolutions.com

NEIGHBOR TO NEIGHBOR
1550 BLUE SPRUCE DR, FORT COLLINS CO 80524-2015
(970) 488-2364
http://www.n2n.org

NORTHEAST DENVER HOUSING CENTER
1735 GAYLORD ST, DENVER CO 80206-1208
(303) 377-3334 ext 229
www.nedenverhousing.org
Want to learn more? Click here to get free information about a reverse mortgage!