Big tax refund - save it or pay down debt?

NEW YORK (CNNMoney.com) -- Time for Gerri's Mail Bag. Viewers and readers write in.

Question 1: My daughter is 26 and considering buying a house. Why isn't it advisable to buy a house with no down payment? -Jeff

Putting no money down is a bad idea. First of all, you're going to have a higher mortgage rate if you don't put anything down. That's because your lender is trying to compensate for taking on that risk.

Second, you won't be able to tap into your home's equity if you need cash. And finally, if home prices drop in your area and you are forced to sell, you could wind up owing the bank more than the house is worth.

Question 2: We are wondering what to do with our $7,000 tax return. We have a fair amount of debt and limited money in our emergency fund. -Jennifer

First off, your tax refund is well above the average. That means you've lent Uncle Sam $7,000 interest free for the year.

You're best bet is to put the bulk of that money toward paying off high-interest debt, like your credit cards. It's smarter to pay off your credit cards at 14 percent interest than it is to sock it in a savings account with 4 percent interest, says Greg McBride of Bankrate.com.

But you should consider adjusting your tax withholding so that you get more money back in your paycheck each month. Use that extra cash to boost your emergency fund.

Question 3: Last year we replaced our roof for $9,406. Is it tax deductible? - Leopoldo

Sorry Leopoldo. That is not tax deductible. But this does add value to your home, says John Roth of tax information publisher CCH. And that added value is going to reduce the amount of taxes you pay on your gain when you sell your home. So make sure you keep the receipts of all your major home improvements.

Guard against tax scams

Volatile stock market survival guide

Too deep in debt? Where to turn for help

Gerri's Mailbox: Got questions about your money? We want to hear them! Send e-mails to toptips@cnn.com or click here - each week, we'll answer questions on CNN, Headline News and CNNMoney.com.