It's tax time again, and you probably are searching your records for every legitimate deduction to keep your taxes down this year.

Homeowners can take significant deductions for many of the costs of buying and owning a home. Here are some of them:

* Mortage interest. Your lender should give you an annual statement breaking down your mortgage payments into principal and interest. Although most lending institutions routinely prepare such an annual statement, you may have to ask your lender for this information--but you have the right to get it.

* Points. These also are called loan origination fees, premium charges, or maximum loan charges. You may deduct these in full in the year of payment where the charge reflects interest--or forbearance of money. If the points are compensation for specific services provided by the lender, you are not entitled to this deduction; it is not interest.

* Prepayment Penalty. If you prepaid your mortgage last year, in whole or in part, and had to pay the holder of the mortgage (or trust) some amount for this "privilege," this is called a prepayment penalty and is fully deductible as interest.

* Local benefit taxes. If assessed for the purpose of maintenance or repair, they are deductible in the year they are paid.

* Real estate taxes. If your lender pays taxes for you, he must give you an annual statement indicating payment of these taxes and the total amount. Taxes are deductible only in the year they are paid to the government; if you escrow this year for next year's taxes, you cannot take a deduction this year.

A number of other items on your settlement sheet are important to you, even though you cannot use them immediately for tax purposes. The following can be added to the purchase price of your house (adjusted purchase price) to be offset against any income when you later sell; title examination; title insurance; survey cost; recording and transfer taxes. Prior to 1974, these were deductible; now, you only can add them to the adjusted base of your house; appraisal fees; credit reports and attorneys fees.

Thus, it is important to retain, in a safe and central place, all the papers you received when you bought your house.