We speak to people every day that have it embedded in their mind to just let their property go to foreclosure.  One of the main reasons for this, is they don’t know the options in order to avoid foreclosure in the first place.

The biggest item of consideration with this decision is the impact on credit.  A foreclosure has a very aggressive impact on credit, both immediately, and in the future.  Most importantly, every time a loan application is filled out, you will always need to inform the potential lender that you have a foreclosure in your past.  This is a huge red flag for lenders when attempting to get a loan in the future.

Each of the alternatives to foreclosure can help you avoid both the short term and the  long term stress.  Whether it be an attempt to modify the mortgage, sell the property prior to the foreclosure date through a Short Sale, each will have a less damaging impact on your credit.   Depending on the terms of the negotiation, it can show on credit as a settlement or as paid in full.  The ramifications of this are less damaging.

Lenders are speeding up their processes for successful short sales of properties, so it is possible that your lender will move swiftly to get your property sold.  Whether it is through the Foreclosure process or the short sale process, there is one guarantee.  You will have to move.

Ultimately, the question that needs to be asked is are you willing to deal with the long term stress of future inability to obtain a loan, or will you exhaust all options prior to moving?  There is plenty of help available to restore credit, and according to most of the information given, you can obtain a loan after a short sale as soon 2 years, whereas through the foreclosure process, not for 7-10 years.

Exhaust all options, you deserve it.