Selling Your House to Preserve Your Credit --SPONSORSHIP

Tom and Susan Mundahl haven't paid on their Wells Fargo Home mortgage in three months. This is not the first time in the past 12 months that they have been 90 days or more delinquent paying on their 2-bedroom single-family home in St. Louis Park, Minn. -- a home they purchased in April 2001 for $133,450. They cringe when they think about how the delinquency is affecting their credit score and their ability to move to a new residence should they lose this one to foreclosure.

"I want to stay where I am, but I am concerned that if I lose my home I am not going to be able to find any affordable housing to rent, and even if I do, no one would want to rent to me because my credit will be so poor," says Susan Mundahl, who, since being laid off in March 2008 from an executive assistant position with the non-profit Hadassah organization, has been unable to find full-time work. Her husband, who recently completed a degree in graphic design, is doing small contract jobs while looking for full-time work.

With a national unemployment rate of 9.5 percent as of July 2010, many homeowners are finding themselves in the same boat of watching their creditworthiness fall as their incomes fall, especially if they are behind in their mortgage payments as they scramble to make ends meet with little to no income.

If this sounds like you or someone you know, there are several things you should know about how this affects your credit.