Financial planners have not traditionally included homes in their clients' financial strategies and have instead focused on stocks, bonds and other investments as a way of building a solid financial future. A mortgage has been seen as a necessary evil, rather than a component in a wealth-building plan. Recently, however, consumer trends seem to indicate that Americans believe that buying a house can be the best way to build a secure financial future. Thirty-one percent of America's total net worth is inside the primary residence, and 67 percent of Americans now have more wealth in their houses than in all their other investments combined. Recent research also indicates that the No. 1 reason — cited by 84 percent of homebuyers surveyed — for buying a home is that consumers believe that it's the best long-term financial investment.

In order to fully capitalize on your house as an investment you'll need to understand that your down payment does not affect your appreciation one bit.

If you pay cash for a $600,000 home and it appreciated 4 percent year then at the end of five years the home is worth $730,000. This means that the $600,000 in cash you put down earned an average rate of return of 4 percent (which currently is less than a bank CD pays). If you buy the same house putting down 20 percent ($120,000), then at the end of five years the house is still worth $730,000. The house appreciates or depreciates, regardless if the home is free and clear or has a mortgage. The difference is you gained $130,000 in net worth ($730,000 current value minus the $600,000 purchase price = $130,000) using only $120,000 in cash and not $600,000. This is almost 110 percent growth on your cash over five years vs. the first scenario of 22 percent. Think what you could have done with the other $450,000.

The important thing to remember is financing a home the proper way is just as important (or probably more important since 67 percent of Americans' net worth is tied up in their property) as how you invest in a retirement or stock portfolio. Resist the urge to compartmentalize your home mortgage. Look at your mortgage as just one part of your overall long and short term financial plan. A properly structured mortgage can help you achieve your financial goals faster.

(David Jaffe is a branch manager at Chase Home Loans in Westlake Village and specializes in helping clients properly manage their home equity and mortgage to build wealth. Jaffe has closed more than $1.5 billion in mortgage loans. He has been featured in Mortgage Originator magazine as one of the top 25 loan originators in the country and has been a national speaker for the mortgage industry for the past six years. For more information, call 449-2000 or visit www.jaffeteam.com.)