If you are having trouble paying your mortgage never, never, never give up until you have tried to work with your bank with some sort of repayment plan or a loan modification.
But if all your options have been exhausted and your only alternative is a foreclosure, how bad will your credit suffer?
From Les Christie at CNNMoney.com: How foreclosure impacts your credit score
Here are the average hit your credit will take:
30 days late: 40-110 points
90 days late: 70-135 points
Foreclosure, shot sale, or deed-in-lieu: 85-160
Bankruptcy: 130-240
Notice that for both borrowers a single one-time black mark results in steep drops, but it is when they fall further behind that things get really harsh. [ a spokesman for Fair Isaac, Craig Watts]
"The lending industry tends to regard an account differently when it has become 90 or more days late," he said, "The likelihood that consumers will resume paying their overdue obligations drops off significantly after the delinquencies have reached 90 days."
In the end don't stress yourself out over all this. It is what it is, but do try and do all you can do to stay in your home. Try to get help first.
Despite the problems a poor credit score can cause. People who are in financial dead ends, like totally unaffordable mortgages, it's better to recognize that and cut your losses quickly; don't prolong the problem. [ vice president for public education at Experian, Maxine Sweet]
"You need to do what you need to do to get your finances back in order," she said. "Don't worry about your credit score."
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