Is your home located in West Islip or Buffalo?

the most important question here is - how did you come up with the value of $360,000 for your home?

If you do a short sale you will not have to come up with the extra cash however it will hurt your credit. Your option to do a short-refinance sounds to be the best option if you wish to keep the place you are in.

If I'm reading correctly between the lines, you currently have an ARM or got yourself into some unmanageable debt in addition to your mortgage. If so, you likely would not qualify for a short sale unless you suffered some significant setback or loss that is causing hardship. This appears to be irrelevant at any rate.

If the house is worth $360K and you owe $315K, you have only $45K equity, not $161K. The sales proceeds and equity should however be more than enough to cover the mortgage and settlement costs of a sale.

If you want to keep the house, talk to your financial adviser and lender about some accommodation that will relieve the financial burden or a fixed rate refi, and be sure to inquire about a buy-down if the current rate is prohibitive.

Ellen
IN order to qualify for a short sale you need to be able to prove hardship. I suggest consulting with a local Realtor experienced with short sales. You could also contact your mortgage lender about restructuring your loan.
Please see the blog I wrote about foreclosure and short sales.

Ellen,
I am looking at the answers given and I am left with a few questions for you. You are stating that you have 161K of equity in your home with a Principal Balance of 315K. What is the market value of your home?

I agree with Gail. A short sale will not be as bad on your credit as a foreclosure or a bankruptcy. You should be speaking with a loss mitigator (a mortgage expert) to determine what is the best course of action is for you,whether it be a short sale or a refinance.
Please contact me at 631-680-0079 or at http://www.mdgoodlife.listingbook.com for a referral of loss mitigators that service your area. Good luck.

Start getting your legal and financial team together and find out exactly where you stand. You are not alone. Read up on all the fancy realty definitions people will toss at you. Try the library once in a while: Particularly the real estate section. Sometimes the devil you know is better than the devil you don't, meaning don't do anything without an independent analysis based on what suits you and you alone. Don't let anyone talk you into anything, keep your eye on the ball, it is in your court. You sound like a smart young guy, look at all the angles but understand; keep your credit in good shape, its big time important. Those credit guys are tricky, have a long memory and take no prisoners. Try to talk to a credit guy from one of the major agencies, it might be an eye opener. Above all -Be On Deck.

Yes, but not as much as a deed in lieu or a foreclosure. You do have another alternative; you might be able to renegotiate your mortgage or refinance. You need to speak with a loss mitigator for this.

Please speak to a mortgage broker (contact me off line for a referral at Gail@GailGladstone.com).

If you are up to date with your payments, a short sale may not be an option; banks do not want to accept short sales on performing loans.