When making an under water house be sure to use fences to block off water from your area. You can use a sponge but its harder. It will suck up the water but it may not always work. Buckets can work to an extent but will work after you fence your area off with fences. Iron bars are also good. Try to fence your house so that water doesn't enter in. If you use sponge and it does work here is something to stay like it. A few words, DON'T DO ANYTHING TO THE WATER! If you break a block the water will come if from that one block. The water base is good when your in a PvP Server or in survival. If there is space you can plant water without using water buckets. All you need is light. If you can do this then you can live in peace.Its a slow process. For the time being you should make a hole in the water to start off. There is only one mob you need to worry about are squids. That's all unless you have other aquatic animals as a mod. I wish you good luck on your home!