There are so many ways to lose your home but signing away your ownership that destroys your credit should be looked at real close before deciding to do that. For owners who can no longer afford to keep their mortgage payments current, there are other ways to get passed this big mess the Country is going through. One of those options is called a "short sale."
Basically, the definition of the short sale is when the lender of a property allows the property to be sold for less than the amount due on the mortgage loan.
The best benefit to the short sale is that it allows the seller to avoid the credit report damage as with a foreclosure. A foreclosure can stay on your credit report for up to 10 years.
Did you know that with your credit score:
On A short Sale late payments on a mortgage will show after completion of a short-sale. The effect can be as short as 12 to 18 months. Depending on how the lender reports it, credit scores will be affected negatively from about 50 to 100 points.
On a Foreclosure it typically will affect credit scores for at least three years. Scores will be negatively affected between 200 to 300 points.
Earl Miller at Coldwell Banker Solano Pacific, Benicia, ca
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