3. You should sit down and decide how long you plan on staying in your home. If you plan on staying for the long term, the best option (depending on how much under water you are) is to just keep paying your current mortgage with the assumption that eventually the value will increase so you will not be underwater forever.
4. You also may approach your current mortgage holder about the possibility of them approving a “Short Sale” A short sale is when you sell your home for less than what you owe on it based on the current market value and your current mortgage will accept this as payment in full generally calling this a “Settled Account” A settled account is when the lender agrees to accept a payment less than the full amount. While a short sale is not as detrimental as a foreclosure on your credit, you will generally have to wait a minimum of 2 -4 years depending on the lender, in order to purchase another home. They are a few lenders very few and far between who may allow no waiting period to purchase another property if you have had a short sale but that will only be if you did not have any delinquencies greater than 30 days on the mortgage associated with the short sale property and also as long as the lender considers your payment for less than full balance as “settled” and not as a charge off. A Charge off is when they can still come after you for the amount still owed over and above the amount they received.
5. The last resort is a foreclosure where you either just walk away from your home or stop paying on your mortgage until the kick you out or evict you. This will be the harshest and most detrimental option to you and your credit history and your family.
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