How to Create a Strong Financial Profile

How to Create a Strong Financial Profile


This article was originally published by Michael Massimino for Bluefire Mortgage



When applying for a mortgage, mortgage lenders will take several factors into consideration when reviewing an application – credit score, debt-to-income ratio, and financial history being the most prominent. Generally speaking, the better these aspects look to a mortgage lender, the better the interest rate will be. Lower the interest rate by a percentage point or two, and this will allow savings of thousands in interest over the course of the loan.


Fortunately, buying a house requires a strong financial foundation that carries over into building wealth if set up properly. Most people have a general idea of how they want to spend their retirement and later years. However, not many stop and figure out how they will financially achieve their desired lifestyle. Furthermore, not many borrowers realize that a strong financial profile will produce positives that stretch far more than just a great rate on a loan.


There are several considerations for retiring comfortably. At a minimum, you should work to fully fund your retirement account(s), own your home, have no debt, and have emergency funds set aside. With that said, building a strong financial profile won’t happen overnight. The key is to build a solid financial foundation that takes care of you now while simultaneously supporting your future goals, which means being responsible with daily purchasing habits and thinking long-term.


- Take Stock of Assets – Make a list of all current assets and liabilities to get a clear picture of where you stand financially, and where improvements should be made.


- Fund a 401k – If you have a 401k, do your best to max out on contributions to gain the most out of this funnel, and allow your money to work for you.


- Pay Off High-Interest Credit Card Debt – Whether you are buying a home, a car, or simply planning for your future, maintaining a high credit score is always a great perk to have.


- Fully Fund a Roth IRA – The Roth IRA builds savings by allowing its owner to make regular contributions and invest them in a portfolio of stocks, bonds, mutual funds or other investments which grows exponentially over time.


- Purchase a Home – Real estate is a great investment option. It can generate ongoing passive income for those looking for long-term investing.


- Build Emergency Reserves – Accidents happen, so it’s important to keep funds set aside to tackle life as it happens without inflicting financial progress.


In order to keep this plan on track, it is important to create and stick with a monthly spending plan, maintain an emergency savings account, and pay off high interest credit card debt as quickly as possible.

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