If you have been paying only the interest part of your loan, it sounds like you won’t be able to afford the mortgage once it resets.
You can certainly try to negotiate a short sale with the lender to “soften the blow” on your credit. However, beware of one potential problem:
Short sales can take a long time. During this time, you’ll continue to “throw good money after bad money”. It’s quite possible that you’ll end up walking anyway because of the frustrations while negotiating with the lender.
You can try the following tactic:
Contact the lender about a short sale & immediately stop making payments (to inject some urgency into the lender’s actions). Of course, if you do this, you’ll have to be prepared to actually go through with the foreclosure if the lender doesn’t agree to a short sale.
