Reverse mortgages are often a misunderstood product in today’s mortgage market. Beth Miller-Rowe and her team at The Reverse Mortgage Group have made it their mission to clear up the myths surrounding reverse mortgages and help people decide if one is right for them.
In a nutshell, a reverse mortgage allows a homeowner to borrow a certain percentage of the value of their house. Homeowners may access their money in a variety of ways such as a line of credit or a monthly income stream or even a lump sum cash payment. Reverse mortgages do not require repayment until the homeowner no longer resides in their home, or until they pass away. Homeowners can choose to make payments or skip them.
“These loans allow you to borrow some of the equity in your home today and preserve some of it for tomorrow,” Miller-Rowe said.
Miller-Rowe was born in Michigan but spent her formative years with her family in Georgia before moving back to Michigan and then attending college in Iowa. In 1982 with a dual degree in economics and business administration, Miller-Rowe packed her car and drove west to support her sister in California, who was going through a divorce at the time. She had no idea the move would be permanent.
“When I first arrived here, I had been driving for four days and ‘When the Lights go Down in the City’ by Journey came on as I crossed the Bay Bridge,” Miller-Rowe recalled. “I cranked it up and sang with tears streaming down my face, ‘I am here.’”
And here she was. Miller-Rowe instantly fell in the love with the natural wonders of the California Bay Area and recalls being especially drawn to the ocean. She loved San Francisco and decided to make California her new home.
Miller-Rowe did not immediately begin selling mortgage products, though. She initially gained a position selling dictation equipment, until one of her customers told her she was in the wrong business.
“I called on a mortgage broker, and he had me come back three or four times to do the presentation,” she said. “Then he told me he never had any intention of buying my equipment, he just wanted to hear me sell it.”
Once she was in the mortgage business, Miller-Rowe realized the truth of that statement. She now offers reverse mortgages exclusively, meeting people in their homes to explain the ins and out of the process and helping them to make an informed decision. COVID-19 did put a temporary halt to her home visits, but Miller-Rowe simply pivoted to virtual meetings. While Zoom worked during the spring, she said she is very happy to be allowed back into homes to meet clients face-to-face.
“I am now going out again as long as they are comfortable,” she said. “I have masks and sanitizing spray, and we just distance ourselves around the dining room tables, and we are able to start having those conversations again, which is so much more enjoyable.”
Sandie Schneider was a client of Miller-Rowe’s three years ago. The 77-year-old widow said she used a reverse mortgage to create financial stability after her husband died.
“There was a significant change in my income stream,” Schneider said. “This was the best way to go and leave me where I wanted to be. It was the answer to my problems.”
Schneider noted the process was remarkably painless with Miller-Rowe’s team, and she has recommended reverse mortgages to several friends.
“(Beth) was such a professional,” Schneider recalled. “I always felt I was in good hands.”
During her interview, Miller-Rowe took some time to clear up some of the myths surrounding reverse mortgages and answer some questions about her business.
Reverse mortgages have a negative stigma. Why do you think that is, and why is it not accurate?
Reverse mortgages do have a stigma, and it is due to myths and misinformation that have been propagated from 20 and 30 years ago. One of the biggest myths is the bank owns your home, and that’s not true. The reverse mortgage is a loan against your house, just like the loan you have today. You do have to pay your property taxes and your insurance, which is true whether you have a reverse mortgage or a traditional mortgage. The other myth people often speak of is that the bank takes the house when the borrower dies, and that is not true. The house goes to the heirs. The heirs are responsible for repaying the loan, whether that’s through a refinance if they want to keep the house, or through selling the house. Most often, it’s through selling the house because there will be multiple heirs. Generally, the heirs are the children, so the kids all want their piece of the inheritance, so the house gets sold, our loan gets paid off and the proceeds get split amongst the heirs.
What kind of client would you recommend a reverse mortgage to?
A reverse mortgage can be right for anyone it completely depends on someone’s goals. It can be right for the person who is struggling month-to-month and having a hard time paying for their medicine or making their mortgage payment. It might also be right for someone who is well to do, and perhaps wants to invest in their business, or buy a second home. It is also often used to manage tax consequences. People draw from their 401(k)s or their IRAs and often times end up writing a check on April 15. With a reverse mortgage they can set the limit on their 401(k) draws and once they reach that limit switch over and start drawing tax-free funds from their reverse mortgage line of credit. Financial planners are now starting to recommend reverse mortgage lines of credit for people with retirement money invested in the stock market. They may take money out of their investments quarterly or perhaps twice a year but if the market is way down they don’t want to draw from that particular asset. The tax-free proceeds from the reverse mortgage line of credit give them the option of drawing from their equity, and perhaps repaying that line of credit, if they choose, when the markets rebound.
Miller-Rowe’s mother-in-law, Ellie Rowe, is an example of a person who chose to take out a reverse mortgage while not in financial straits. She chose a reverse mortgage to protect her property from taxation.
“I was going over my finances, and I thought, ‘hey, this might be a good idea,’ and I sat down and looked at everything,” Rowe recalled. “I looked at all of my assets, most of which were in real estate, and decided I was going to get a reverse mortgage and if I needed the extra income I’d have it. I wouldn’t have to sell my real estate, which could have caused a tremendous tax burden.”
Miller-Rowe lives in Concord with her husband, Charlie. The couple enjoys taking their motorhome out to chase storms, visit the beach or go camping. They enjoy traveling and even took a copy of The Brentwood Press with them on a trip to Thailand. One of her favorite East County activities is cherry picking in the spring.
Miller-Rowe’s office is located at 3478 Buskirk Ave., Suite 1000, in Pleasant Hill. For more information on a reverse mortgage, call 925-969-0380 or visit www.YourReverse.com.