Mortgage questions? Talk directly with the Denver Lending team. (720) 605-9327
Denver Lending (720) 605-9327See my options

Colorado reverse mortgage guidance

Use home equity with a plan for the years ahead.

Denver Lending helps Colorado homeowners and their families compare federally insured HECM and proprietary jumbo reverse-mortgage options, understand the lasting obligations, and decide whether using home equity supports the homeowner's goals.

Request a reverse mortgage reviewCall our Colorado team
The plain answer

A reverse mortgage can improve cash flow, but it is still a loan. The right decision starts with the homeowner's timeline, available equity, property obligations, family plan, and alternatives.

No required P&IMonthly principal-and-interest payments are generally not required while loan obligations are met
HECMFederally insured option with HUD requirements and independent counseling
JumboProprietary options may serve some higher-value Colorado homes
Family planOccupancy, future care, heirs, taxes, insurance, and maintenance all belong in the discussion

HECM versus proprietary jumbo: why the distinction matters

A Home Equity Conversion Mortgage is insured by the Federal Housing Administration and is the most common type of reverse mortgage. HECMs follow HUD rules, including approved counseling. A proprietary reverse mortgage is offered by a private lender and is not FHA-insured; it may provide a different fit for some higher-value properties.

Neither category is automatically better. Available proceeds and costs depend on factors such as age, home value, existing liens, interest rates, property eligibility, and the specific program. Denver Lending compares the structure that is actually available rather than treating “reverse mortgage” as one uniform product.

A Colorado jumbo reverse mortgage case study

A recent Denver Lending client owned a home valued above $3.5 million and was concerned that retirement funds would not comfortably support the goal of remaining there for about another decade. The selected proprietary reverse mortgage paid off an existing loan of approximately $400,000 and created access to a line of credit of more than $1.1 million.

The new loan did not require monthly principal-and-interest payments while its obligations were met. This changed the client's monthly cash-flow picture and provided a potential source for future expenses, including property taxes and homeowners insurance. Draws from the credit line are loan advances: they reduce remaining availability and increase the balance owed. Interest and fees accrue, so this was evaluated as a long-term housing and retirement decision—not free money or a guaranteed ten-year outcome.

Client privacy notice: This example is based on a Denver Lending client transaction. Financial amounts have been rounded, and certain nonmaterial details have been modified to protect the client's privacy. Individual circumstances, eligibility, loan terms, available proceeds, and results will vary.

The responsibilities continue after closing

A reverse mortgage removes the requirement for monthly principal-and-interest payments under the loan terms; it does not remove the costs of owning the home. The borrower must continue to satisfy the specific loan requirements.

  • Occupy the home as the required principal residence and complete occupancy certifications when applicable.
  • Pay property taxes, homeowners insurance, HOA dues, flood insurance, and other applicable property charges on time.
  • Maintain the property and complete required repairs.
  • Understand that interest and fees are added to the balance, which generally increases over time and reduces remaining equity.
  • Plan for what happens if the borrower moves, needs long-term care, sells the home, or dies.

How proceeds may be used

Depending on the program and the borrower's eligibility, proceeds may be structured as a line of credit, cash at closing, scheduled advances, or a combination. Existing mortgage liens generally must be paid off as part of closing. The amount left afterward determines what may remain available to the homeowner.

Useful planning questions include: How much liquidity is needed now? What should remain available later? Who will monitor property charges? How would future draws affect the balance? What is the plan if the home is sold or the homeowner moves permanently?

Buying a Colorado home with a HECM for Purchase

A HECM is not limited to a home the borrower already owns. HUD explains that a HECM may also be used to buy a new principal residence when the buyer can bring funds to cover the difference between the HECM proceeds and the sales price, plus applicable closing costs.

This option may be worth comparing when a homeowner is downsizing, relocating closer to family, or seeking a home that better fits future accessibility needs. It does not eliminate the buyer's cash requirement or the continuing duties to occupy the property as the principal residence, pay property charges, and maintain the home. The exact cash needed and available proceeds depend on the borrower, property, current program terms, and loan structure.

A HECM for Purchase is not automatically preferable to paying cash or using a traditional purchase mortgage. The decision should account for the expected time in the new home, cash reserves after closing, accumulating loan balance, property costs, and estate plan.

When a reverse mortgage may—or may not—fit

It may be worth evaluating when an eligible homeowner wants to remain in the home, reduce required monthly debt payments, create access to home equity, or coordinate housing wealth with a broader retirement plan. It may be a poor fit when a near-term move is likely, property charges are difficult to maintain, preserving the greatest possible equity is the dominant goal, or a less costly alternative accomplishes the same purpose.

A responsible comparison may include selling or downsizing, a traditional refinance, a HELOC or home-equity loan, retirement-account withdrawals, public benefits, or family support. Denver Lending provides mortgage information and loan comparisons; borrowers should involve independent tax, legal, estate, and financial advisers where appropriate.

Independent information and counseling

For unbiased education, review the Consumer Financial Protection Bureau's reverse-mortgage rights and responsibilities guide. For HECM information and a HUD-approved counselor, use the U.S. Department of Housing and Urban Development's HECM resources or call HUD's housing-counseling line at (800) 569-4287.

Reverse mortgage questions

Answers for homeowners and families.

What is a reverse mortgage?+

A reverse mortgage is a loan secured by the home that can let an eligible homeowner access part of the home's equity. The borrower generally retains title and does not make required monthly principal-and-interest payments, but interest and fees are added to the balance over time.

What is the difference between a HECM and a proprietary jumbo reverse mortgage?+

A Home Equity Conversion Mortgage, or HECM, is insured by the Federal Housing Administration and follows HUD requirements. A proprietary reverse mortgage is privately offered and may serve some higher-value homes or scenarios outside HECM parameters. Features, protections, costs, and eligibility can differ, so the actual proposals should be compared carefully.

Do I still own my home?+

The borrower generally retains title. To keep the loan in good standing, the home must remain the required principal residence, property charges such as taxes and homeowners insurance must be paid, and the property must be maintained according to the loan terms.

Can a reverse mortgage pay off my current mortgage?+

Reverse-mortgage proceeds may be used to pay off an existing mortgage at closing when sufficient proceeds are available. Any required payoff reduces the amount remaining for cash, a line of credit, or other permitted disbursements.

Can I use a HECM to buy my next home in Colorado?+

A HECM for Purchase can finance part of the purchase price of an eligible new principal residence. The buyer must bring an eligible monetary investment to closing to cover the difference between the HECM proceeds and the sales price, plus applicable closing costs. HUD-approved counseling and other HECM requirements apply, and the homeowner remains responsible for property charges and maintenance.

Can I use a reverse-mortgage line of credit for taxes and insurance?+

Depending on the loan structure, available line-of-credit funds may be drawn for property taxes, homeowners insurance, or other expenses. Those charges remain the homeowner's responsibility, and each draw increases the loan balance and reduces the credit still available.

When does the loan become due?+

A reverse mortgage generally becomes due when no borrower continues to live in the home as a principal residence, the home is sold, or required loan obligations are not met. The exact rules depend on the loan and any eligible non-borrowing spouse protections.

What happens to the home and my heirs?+

Heirs may generally sell the home, repay the balance and keep the home, or pursue other options allowed by the loan. Because deadlines and protections differ, borrowers should include family members and estate or legal advisers in the planning when appropriate.

Is independent counseling required?+

HUD-approved counseling is required before a HECM can close. Proprietary programs may have different counseling requirements. Counseling is an important independent step, but it does not replace legal, tax, or financial advice.

Start with the goal

See whether a reverse mortgage deserves a closer look.

Tell us about the homeowner, property, existing mortgage, and long-term housing plan. We will explain potential paths and the next information needed—without presenting a consultation as an approval or commitment to lend.

Request a review