1) When is it appropriate to do an interaction in multiple regression and at what point in my development of the model do I do it... I have already run my model, tested coefficients for significance and started testing assumptions. Can I do an interaction after I have made sure the model doesn't violate assumptios or does it need to be earlier...like after the creation of dummy variables?

2) Homoscedasticity - have tested this assumption using a residual plot in excel but I have no idea if it is right. WHen i use the regression function it creates a residual plot with one of my independent variables on the x-axis and residuals on the y-axis - but I thought that the x-axis was meant to be the fixed values - so for example 'predicted house prices'.

Also what do I do if I find the residual plot is slightly curved? How do I correct for it easily. I don't want to transform my variables as this will make interpretation harder.

If anyone could help me with these I would be so grateful....feeling so stupid right now Thank you so much.