If you are no longer in a position to pay your mortgage installments or are unable to get a mortgage re-finance, you can opt for short selling your home. Short sale is better than a foreclosure. Unlike a foreclosure, a short sale does not affect your credit report. A credit report that remains untouched by your financial hardships would stand you in good stead in future.
A short sale negotiation can be instituted any time. All it needs of you is to remain the homeowner on records. There have been many cases where a short sale has been approved and completed just a few minutes before the scheduled auction. However, it is better to have more time in hand. As a homeowner you can start a short sale process before you fail in your payments. Knowing your options or keeping an emergency exit ready always makes lot of sense.
And if you are truly in a soup, you can seek the services of a loss mitigation company. If the owner is unable to make mortgage payments, all banks permit loss mitigation companies to negotiate a short sale on behalf of the owner.
If the property is your primary residence, the bank will not chase you for the difference in amount, if you opt for short selling your house. However, if your house gets foreclosed, the state would decide whether or not to go after you.
A Short sale process is tedious and convoluted, but is a better solution than foreclosing. However, if you are hard pressed to go for a foreclosure, hire the services of an attorney to mitigate your losses.
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