This is a question you should discuss with your attorney. If you and your spouse bought the house jointly, you’ll both be responsible for whatever happens until the mortgage is paid in full, settled (short sale) or defaulted. A short sale, selling the house for less than what is owed, will require the cooperation of your lender and often times, but not always, the lender will not be willing to approve the short sale unless there have been missed payments. When you combine the missed payments that hit your credit record along with the debt that was “settled” it can have a dramatic impact on your credit score and certainly will affect your ability to borrow in the future. This is definitely something you and your lawyer will want to map out a strategy to address in a manner that will be the least harmful.
I do many military short sales in the Virginia Beach/Hampton Roads area. If you have a "hardship" such as divorce you will have a good case for a short sale. I just sold my neighbor's home under similar circumstances and he received a deficiency waiver in the tens of thousands.
I do not advise missing a payment nor is it required to do a short sale. Not sure what type of mortgage you have but most all now will work with military especially a VA Compromise Sale. Good luck.
For military short sales, do you know how this would affect my credit? I have never missed a payment on my mortgage and my house has been on the market for a year and has not sold. Just trying to see what the best option is.
My attorney's office states that about 70 points (approx/max) assuming you are current on all mortgage/other debt. Normally, when you start missing payment(s) the worse hit to credit.
The 1/2 dozen short sales I have done this year I believe sellers have seen 20-50 points and all were current on all debts. Obviously, you cannot buy for about two years but normally this is last thing on sellers mind.
If a VA compromise sale then you will lose a portion of that VA entitlement if wanting to use in the future.
Hope this helps, Dennis