Gerri Willis Commentary:
Top Tips by Gerri Willis Column archive

Tax and loans do's and don'ts

Gerri Willis offers tips for home shoppers and credit card debtors.

By Gerri Willis, CNN

NEW YORK ( -- Question 1: I am 27 years old and want to buy a house by age 30. I am starting to finally put a dent into my credit card debt. However I won't have money for a house down payment. Is it so terrible to buy a house with no money down? -Lori, CA

It's great that you're able to pay off some of that debt. But putting no money down on a home is not advisable. And remember, it's not only the down payment you'll need, but also closing costs, says Greg McBride of Don't lose sight of the goal to pay off your credit cards, but make saving an equal priority. Have some of your paycheck automatically funneled into a savings account or a CD. Getting into the habit of saving is the surest way of reaching your goal.


Question 2: I have just paid off 7 credit cards. Would it be wise to close them now? Will this raise my credit score or lower it? - Bon

Good job paying off those cards. It's in your best interest to close some of those cards so you aren't tempted to run up your debt again. And although closing these accounts won't automatically raise or lower your FICO score, mortgage and auto lenders still gauge your credit risk by your credit limit. So, reducing that credit limit is a real positive. For more on what affects your credit score, you can go to

Question 3: What is an old fashioned home equity loan and how does it differ from a HELOC? - Ray, Illinois

A home equity loan is really just a second mortgage. The interest rate is fixed and your monthly payments remain the same. Taking out a home equity loan is a good move if you plan on using the money in a lump sum - like, paying for college or paying off medical debt. A HELOC - or a home equity line of credit works like a credit card.

It carries a variable rate and you can tap into it whenever you need to. You can adjust your monthly payments with a HELOC and you'll be able to benefit if interest rates decline. A HELOC can be a great way to pay for debt that comes in stages, like home improvement projects or for emergency funds if you lost your job.

Question 4: Can I take money from a taxable account and put it into an IRA to take advantage of the deduction? Then, can I put the money back into the taxable account after I've gotten my refund? -A.Turner, TX

The sad fact is that you're going to pay taxes on your money sooner or later. So whether you shelter it in your IRA or you pay taxes on it now is up to you. But keep in mind that if you're younger than 59 and a half years old you'll have to pay taxes plus a 10% penalty if you withdraw money.


Credit score do's and don'ts

Charitable gift giving

How to avoid car-financing traps

Gerri's Mailbox: Got questions about your money? We want to hear them! Send e-mails to or click here - each week, we'll answer questions on CNN, Headline News and  Top of page