If you live in the Chicago area, consider yourself lucky: Chicago has not seen the catastrophic drops in value and foreclosures that have hit cities such as Las Vegas, Detroit, Cape Coral, FL and Stockton, CA. (See Forclosures: 100 Worst Hit Zipcodes at www.CNNMoney.com). However, this comfort may be as cold as a Chicago winter if you are trying to refinance or sell your home.
So what do you do to protect your home and come out in the best possible standing? First of all, if you are in any danger of falling behind on your mortgage payments, talk to your lender. It is in their best interest to work something out with you. Banks and mortgage companies are in the business of lending, NOT buying, selling, or owning property. Also, you may qualify for an FHA loan which, by the way, requires a lower credit score. For more information, go to www.fha.org.
Secondly, evaluate your home. You can accomplish this by making an appointment with a realtor who is familiar with your area. By doing a CMA (comparative market analysis), a realtor can tell you what similar houses have sold for and what a typical buyer is looking for.
Also, keep in mind that the real estate market cycles periodically; we just happen to be in the down cycle right now. But if you believe that what goes up must come down, then surely what goes down must come up.
Lastly, stay positive. If you are going through a rough time, count your blessings. Find things to be happy about. Remember what really counts in life, and if you don't feel you have what counts, take steps to change that.