If I default on a mortgage what happens to my credit?

If you default, they can still come after you for the difference between loan principal and selling price. Better to sell it yourself and take the loss if you can. And yes, your credit score will plummet, but if you're on a fixed income, you're gonna save up and pay cash for all future purchases, right? Good luck.

First thing that will happen is your credit will get hit with monthly negatives each month you don't pay. After 3-6 months, the bank will foreclose on the property, so you'll then have a foreclosure on your credit report. The bank will auction the property off. Depending on your state's laws, the bank may be able to sue you for the remaining balance.

The better option is to do a short sale, without recourse. This is where you get your lender to agree to let you sell the property for what it will bring, and let you off the hook for the remainder. this is also bad for your credit, but it's not qutie as bad as a foreclosure.

It will be a serious derogatory item and probably drop your score 100 to 150 points, depending on what else shows on your credit report.