Yes. I said it. And I said it right here on my blog. And I’ll say it again. Equity management is not what it’s cracked out to be and today’s mortgage market bears that out beautifully. Why is this a big deal? Well, because within our industry anyone who does not believe in equity management strategy is considered a dinosaur. The thinking is that equity management is the wave of the future and takes into consideration the evolved mortgage landscape.

To be honest with you, personally and as a mortgage professional, I have never felt comfortable with equity management. The enthusiasm that I hear about equity management reminds me of the “new economy” arguments of the late 1990s. And we all know how those companies turned out don’t we? Pets.com anyone? “Because pets can’t drive”.

In an article at AgentGenius (I’m a guest writer for this national Real Estate blog), I outline four reasons why I think equity management is overrated. Here is a summary of the four reasons:

1. What happens if you mortgage yourself to the hilt and then the real estate market crashes? Oh wait that may have just happened to a few folks.

2. I’ve read surveys which show that a major event happens in a person’s life every three to four years. Now if you’re trapped in a 100% interest only mortgage within a flat real estate market, things don’t look too rosy, do they?

3. It has also been found that people do not stay in a mortgage for more than four years and in a house for more than seven years. I believe the best way to ensure your mobility is equity in your home.

4. Finally, this strategy simply doesn’t work for folks on tight budgets, erratic spending patterns, those with credit card debt etc.

Bottom line is I can’t play dice with the roof over my child’s head. I am confident that I can create wealth without compromising the asset that holds the key to everything about my future. Plain and simple. Irrational? Maybe? But wise? I think so.

Read “Equity Management is Overrated” at AgentGenius.com for my full take.