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 4,057 1,590,152,387
UNIVERSAL LENDING CORPORATION 2,792 860,153,163
FINANCIAL FREEDOM SENIOR FUNDING CORP 1,934 355,643,247
FAIRWAY INDEPENDENT MORTGAGE CORPORATION 1,488 674,138,404
APPROVAL FIRST HOME LOANS INC. 1,356 507,507,155
WENDOVER FINANCIAL SERVICES CORP 1,192 119,637,250
FINANCE OF AMERICA REVERSE LLC 1,184 442,794,552
CHERRY CREEK MORTGAGE CO INC 1,038 344,186,533
REVERSE MORTGAGE FUNDING LLC 905 438,099,808
ONE REVERSE MORTGAGE LLC 755 226,343,312
ALLIANCE GUARANTY MORTGAGE CORP 650 138,077,465
SILVER LEAF MORTGAGE INC 643 271,812,380
MUTUAL OF OMAHA MORTGAGE INC. 624 328,162,539
MOUNTAIN PACIFIC MORTGAGE CO 536 108,704,039
SYNERGY ONE LENDING INC. 449 170,012,720
AMERICAN LIBERTY MORTGAGE INC 443 186,476,830
MAC5 MORTGAGE INC. 426 169,019,595
PROVIDENT LENDING CORPORATION 424 117,957,309
LIBERTY HOME EQUITY SOLUTIONS INC 389 130,116,150

Since 2012

Lender Loans Total Principal Limit
AMERICAN ADVISORS GROUP 3,869 1,544,171,917
FAIRWAY INDEPENDENT MORTGAGE CORPORATION 1,412 659,330,139
UNIVERSAL LENDING CORPORATION 1,268 498,298,438
APPROVAL FIRST HOME LOANS INC. 1,236 475,427,655
REVERSE MORTGAGE FUNDING LLC 905 438,099,808
FINANCE OF AMERICA REVERSE LLC 758 346,890,713
SILVER LEAF MORTGAGE INC 643 271,812,380
ONE REVERSE MORTGAGE LLC 636 198,975,152
MUTUAL OF OMAHA MORTGAGE INC. 624 328,162,539
CHERRY CREEK MORTGAGE CO INC 588 220,210,769

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%
2022-12-01 6.30% 6.84%
2023-01-01 5.99% 6.99%
2023-02-01 NA 7.01%
2023-03-01 NA 7.22%
2023-04-01 NA 6.94%
2023-05-01 NA 6.92%
2023-06-01 6.93% 7.15%
2023-07-01 NA 7.44%
2023-08-01 NA 7.55%
2023-09-01 NA 7.67%
2023-10-01 NA 7.71%
2023-11-01 NA 7.74%
2023-12-01 NA 7.67%
2024-01-01 NA 7.44%
2024-02-01 NA 7.19%
2024-03-01 NA 7.16%

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 704
2 AURORA 80014 696
3 DENVER 80207 649
4 ARVADA 80004 568
5 ARVADA 80003 563
6 LOVELAND 80538 547
7 GREELEY 80634 542
8 DENVER 80221 524
9 LITTLETON 80123 511
10 LONGMONT 80501 493
11 LOVELAND 80537 486
12 LAKEWOOD 80226 477
13 DENVER 80205 476
14 LITTLETON 80127 453
15 AURORA 80013 450
16 BROOMFIELD 80020 426
17 DENVER 80211 420
18 WHEAT RIDGE 80033 409
19 LITTLETON 80128 407
20 DENVER 80210 390
21 GOLDEN 80401 386
22 LITTLETON 80120 385
23 WESTMINSTER 80031 382
24 CENTENNIAL 80122 373
25 AURORA 80012 371
26 COMMERCE CITY 80022 368
27 ENGLEWOOD 80110 364
28 GRAND JUNCTION 81504 364
29 MONTROSE 81401 354
30 PARKER 80134 350

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!