Thinking about buying a house?

I don't know how many people read what I put up here, but if any of you are considering buying a house, I wish to pass on some knowledge that would have helped me out.

The first is your credit score. There are some things you can do to help your score over time, but it will take time to improve it. Basically, hold on to your oldest credit card, at least pay minimum due, and always pay on time. Oh, ya, check your credit report through annualcreditreport -- not the imitators.

Following along with your credit score, is your mortgage application. It would help on your mortgage application if you can keep from using your credit cards in the months before you apply. The mortgage people are going to look at your current balances, and assume that is debt you are going to pay off at the min payment -- regardless if you have a rock solid history of paying off your credit card completely every month -- which is really good thing to do! So, keeping your card balances to absolute minimums reduces the value of the 'liabilities' column when the bank calculates your net worth. -- Handy trick, but not necessary to get a loan.

How did I learn this?!?!? Well, this is going to be a shamless plug for a book I'm reading by Suze Orman called Young, Fabulous, and Broke. It is a good book that gives a basic explaination of the financial world as it pertains to young people in college or starting their careers. And, it is entertaining to read! If you never watched Suze Orman's show on tv, you should do it at least once. She has no reservations telling people you are doing a dumb thing. But she doesn't just say that, she has really good facts and math to backup her statements.

The second tip is take what the bank, realtor, etc. says about tax deductible mortgage interest, and flush it! You should look at the 1040 yourself and read where mortgage interest is deducted. It is in the itemized deduction section; therefore you must itemize all your deductions to take advantage of it. Therefore, if your mortgage interest for the entire year is, say, $8000 (and you had no other itemized deductions) you would be a dumbass to use your $8000 in itemized deductions because the standard deduction you could use instead is $10000. All I'm saying is to look at that itemized deduction worksheet - know which lines pertain to you, calculate your mortgage interest for the year, and then decide if it in your best interest to use the mortgage interest as a deduction.

And about itemized deductions.... I've been glancing it over and it seems there is provision in charitable contributions that you can deduct $.14 per mile for transportation to do volunteer work. There also seems to be a health expense section that includes insurance premiums. And a section to deduct state income tax - you Texans could do a sales tax deduction. That makes sense, why have uncle sam tax the money you paid as tax? They'd be taxing your taxes!

I know, reading tax forms and instructions is not fun. Especially if you only might need to know the information. At least read Suze Orman's book, it is entertaining at least, if you don't get any tips from it.