Recession-proof your life

NEW YORK (CNNMoney.com) -- A lot of you had questions on how to recession-proof your life. Gerri Willis had to clean out the inbox early. So we're bringing you e-mails early!

I am in the middle of the "perfect" storm. My savings in the stock market has dropped $100,000 and my house has dropped in value too. I filled out the FAFSA when my son entered college and got absolutely nothing. Now that my stocks have dropped and I have two kids in college. Should I still fill out the FAFSA again? What are middle-income parents to do? - Debbi, New York

I know how hard it is, but to your question, a resounding yes! The drop in your home value probably won't affect how much aid you get, but the loss of money in stocks may have an impact.

Here's what to do: fill out the FAFSA again and then call the colleges' financial aid office and ask for a Professional Judgment Review. This is how the school can make adjustments to what kind of financial aid you get. Be sure to bring documents that support any unusual financial circumstances, like a loss or change in income or a disability in the family.

And here's a caveat. If you have two kids in college, rather than just one, you qualify for much more aid. You can also check out the expected family contribution calculator on Finaid.org. You can plug in how many children you have in college and your assets to see how much aid you may receive.

With the recent Federal interest rate cuts, is this a good time to refinance my home loan? What things should I take into consideration prior to refinancing i.e. credit score? - Ricardo, Florida

The bottom line is: if you have good credit, you'll be a winner. Falling mortgage rates are great for homeowners looking to refinance. This is especially true if you face an adjustable rate mortgage reset.

But lenders are getting stricter. Today you'll need 20 percent equity in your home and a credit score of about 760 depending on the loan you get, to even be considered for a refinance. One mortgage broker we talked to said that in the past 8 out of 10 people who walked through the door were able to refi. Today, that number is more like 3 out of 10.

So, if you don't have great credit, you want to focus on paying off high-interest debt, mailing in your payments on time and don't apply for any other credit in the meantime. Keep in mind, refinancing isn't free. It can cost 1-2 percent of the value of the loan.

Is it a good idea to buy real estate during a recession? - jordanfan954

It's not about the economy's health. It's your personal wealth. If you're in a position to make the payments and you have a down payment, start shopping. There are bargains to be had. Housing prices have fallen dramatically in some places.

And many economists say that prices will fall even more. Merrill Lynch, for example, says this year home prices will fall 15 percent and 10 percent in 2009. So, it is a good time to start the process of home buying. 30 year fixed rates are at 2 and a half year lows and it certainly is a buyers market.

Now is the time to get the best credit score that you can - investigate markets you're interested in and start squirreling away your down payment.

Countrywide Bank has by far the best CD rates that I have seen lately. Is it too risky to open a new account with them given their subprime woes? They are FDIC insured but would I be signing up for a headache? - Denise, Pennsylvania

I understand your concerns. But the bottom line is that Countrywide was bought by Bank of America and since both banks are FDIC-insured, your money is insured by the federal government up to $100,000. If you're so worried about it, check out other high yielding CDs at bankrate.com. There are plenty of internet banks offering high interest rates