Will this affect my credit?

Answer

Missing mortgage payments hurts your credit — that damage is already happening whether you sell or not. But selling BEFORE a foreclosure is finalized usually does a lot less credit damage than a completed foreclosure on your record. A completed foreclosure can drop a good score by 160 to 240 points and stays for seven years. A pre-foreclosure sale — even a short sale — is usually far less severe. Acting sooner tends to be significantly better for your credit long-term.