Colorado § 38-39-106 Future advances

Colorado Statutes

§ 38-39-106 — Future advances

Colorado § 38-39-106

Title 38Property -

Art.Mortgages, Deeds of Trust, and Other Liens

This text of Colorado § 38-39-106 (Future advances) is published on Counsel Stack Legal Research, covering Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Colo. Rev. Stat. § 38-39-106 (2026).

Text

(1)Any mortgage may, by its terms, secure future advances up to a total maximum principal amount expressly set forth in such mortgage. Such mortgage shall be effective to secure payment of all advances, both obligatory and optional, up to the stated maximum principal amount to the same extent and with the same effect and priority as if such total maximum principal amount had been fully disbursed on or before the date such mortgage was recorded.

(2)Such mortgage shall also secure, to the same extent and with the same effect and priority, the following additional amounts regardless of whether such additional amounts, when added to the principal amount of the indebtedness, exceed the maximum principal amount stated in the mortgage:

(a)All increases in the principal amount that r

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(1) Any mortgage may, by its terms, secure
future advances up to a total maximum principal amount expressly set forth in such
mortgage. Such mortgage shall be effective to secure payment of all advances,
both obligatory and optional, up to the stated maximum principal amount to the
same extent and with the same effect and priority as if such total maximum
principal amount had been fully disbursed on or before the date such mortgage was
recorded.

(2) Such mortgage shall also secure, to the same extent and with the same
effect and priority, the following additional amounts regardless of whether such
additional amounts, when added to the principal amount of the indebtedness,
exceed the maximum principal amount stated in the mortgage:

(a) All increases in the principal amount that result from negative
amortization or the addition of deferred interest;

(b) All disbursements made for the payment of taxes, levies, or insurance
with respect to the property subject to the mortgage or made to protect such
property from waste, damage, or abuse;

(c) If the mortgage or evidence of debt secured by the mortgage so provides,
all reasonable expenses associated with collection of the indebtedness or
foreclosure of the mortgage; and

(d) Interest on any of the items specified in paragraphs (a) to (c) of this
subsection (2) in accordance with the terms of the mortgage or the evidence of
debt secured by the mortgage.

(3) Subsection (1) of this section shall not apply to any subsequent advance
against a mortgage instrument after a mortgagee has initially advanced principal
up to the maximum amount stated in the mortgage, unless the mortgage
instrument clearly states that it was made pursuant to a revolving credit
arrangement.

(4) This section shall have no application to the priority of general
mechanics' liens arising pursuant to article 22 of this title, and the priority of such
general mechanics' liens with respect to a mortgage which secures future
advances shall be determined without reference to this section.

(5) As used in this section, unless the context otherwise requires,
mortgage means a mortgage, deed of trust, or other instrument creating a lien on
real property to secure the payment of an indebtedness.