How to find a home or get a college loan

NEW YORK (CNNMoney.com) -- Question 1: Next year, we'll be in the market for a home. Please cite any sources I might find useful to help me start my search. - Stephen, Minneapolis

First, you'll want to figure out exactly how much house you can afford. There's no sense in falling in love with something that's out of your league. You can use Web sites like bankrate.com and hsh associates at hsh.com.

Then of course, you'll want to check on what houses are going for in the neighborhood at zillow.com. You'll also want to check in with the area's largest realtor. Go online to their website to get a sense of what's out there.

Question 2: Where can I get more information on affordable student loans? I have a teenager who will be going to college in 2008. I need to find loan money in the next 12 months. - Michelle, Florida

First of all, you want to get as many Federal loans as possible since they're always cheaper than private loans. Lenders will compete by offering discounts, like a .25% interest rate reduction if you have you make a certain number of on-time payments.

For a list of what benefits lenders are offering, go to finaid.com. You should also check out MyRichUncle.com. This company offers federal student loans, like any other bank, but at more attractive rates says Mark Kantrowitz of Finaid.com.

Here's an example of what you would save using MyRichUncle.com versus lender Sallie Mae: on a $10,000 Stafford Loan with a 6.8% interest rate, MyRichUncle.com is offering a 1% interest rate reduction off the bat while Sallie Mae is offering a 3.3% reduction on the principle after a student makes 33 months of on-time payments.

In the end, the student would save almost $1 thousand dollars with MyRichUncle.com. With Sallie Mae, the savings is less than $750 dollars.

Question 3: What should a person do first: pay down a mortgage, invest in an IRA or invest in a college fund? - Jehad, Ohio

Short answer: Your IRA. The general rule here is that retirement should take priority over the future college education of your kids or grandkids because they can always borrow money. And keep in mind that mortgage debt, for most of us, is low cost debt with interest rates under 6%.

So you don't have to be in such a hurry to pay it off says Greg McBride of Bankrate.com. Funding an IRA is a high priority, especially if you're young because the compound interest can really make a big difference.

Question 4: I have three children, ages 2 through 8 and want to put away money for them in CD's. Do you have a better suggestion to help pay for college and other related expenses (studies abroad, etc)? - Melanie R.

CD's aren't ideal for college savings. First of all the tax benefits of having assets in your child's name is minimal. Plus, whatever is in that CD will be treated as a student asset. When they're ready for college their chances for financial aid will be hurt.

You're better off investing in a Coverdell Education Savings account. Now, keep in mind, there's a yearly maximum contribution of $2,000, but seeing as though you're starting early enough, you can amass quite a savings. Plus, you can use the savings in the Coverdell to cover anything from books to study abroad...even high school costs without penalty.

One final tip for everyone: Don't forget this Tuesday new passport rules go into effect. That means everyone arriving by air to the US has to show a passport. This includes US citizens and citizens from previously exempt countries like Canada and Mexico.

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