When making monthly mortgage payments, homeowners have the option to let the bank calculate their payment using the principal loan amount and interest on that amount or roll over any taxes and mortgage insurance fees into that payment as well. Should the buyer choose to calculate their monthly payment with just their principal and interest, the buyer is responsible for the separate, lump-sum insurance and tax payments. These payments can cost thousands and occur once or twice a year.

Banks are interested in including your insurance and tax payments in your monthly payments because failure to pay them results in a tax or insurance lien on the property.

While car dealerships primarily use credit reports, when applying for a mortgage most lenders will check your FICO score. This score is pulled from the 3 major credit bureaus Equifax, Exeprian, and Transunion. This makes for a tighter score range than standard credit scores.

Your credit usage affects your score just as much as missed payments. A good benchmark to work toward is an under 10% usage rate for your credit card(s).

For example: You own four credit cards with a $5K limit which equals to $20K total limit. Ideally, you should try to spend $2K before paying off your bill.