Struggling with high mortgage payments?: Five tips for people who can't pay their mortgage

Are you struggling to make your monthly mortgage payments? If you're in a little over your head and need help making ends meet, we have some good news: you may have more options than you think when it comes to lowering your monthly mortgage payment.
One biggie is refinancing to change the terms of your mortgage.
"It's a good time to refinance for many people because they could save a lot in interest costs due to the current low interest rates," says Justin Pritchard, a financial planner who writes the About.com's banking and loans column.

Of course, there are also various ways to refinance, since everyone's mortgage and personal circumstances are unique.
That's why we came up with various solutions to help you lower your monthly mortgage payment and put more cash in your hands, rather than your lender's.

#1: Lengthen Your Mortgage Term

Did you get a 15-year mortgage when you bought your home? Are you now having trouble keeping up with the monthly payments? One solution to help lower your monthly payments is to refinance to a 30-year fixed-rate mortgage.
How will this lower your payments? "Because you're paying off the same principal over a longer period of time, your monthly payments are lower," says Elizabeth Weintraub, who has 30 years of experience as a realtor and writes about real estate for About.com.
However, she adds that this benefit does come with a price. Because a 30-year mortgage is paid off over a longer period of time, you will end up paying much more in interest over the life of the loan.
Now, let's see an example of how the monthly payments would change on a mortgage of $300,000 with different lengths. We'll use the current interest rates for 15 and 30-year fixed-rate mortgages as of November 21, 2012, according to Freddie Mac, an institution established by Congress in 1970 to provide liquidity, stability, and affordability to the nation's residential mortgage markets.

	15-Year Mortgage	30-Year Mortgage
Loan Amount:	$300,000	$300,000
Interest Rate:	2.63 percent	3.31 percent
Monthly Payment:	$2,018.78	$1,315.52

Conclusion: As you can see, despite the 15-year mortgage having a lower interest rate, having a 30-year mortgage for the same amount results in a monthly payment that's $703.26 lower. That could ease some financial pain.

#2: Refinance to a Lower Interest Rate

There's a good reason most of the chatter surrounding refinancing is about today's historically low interest rates: it's the single most important thing there is when it comes to the lifetime cost of your mortgage, says Pritchard.
This means that if you're having trouble making ends meet, refinancing your mortgage to a lower interest rate could provide some much-needed relief.
"If you lower your interest rate you probably lower your monthly payment, because the interest rate is a big part of your monthly payment calculation," says Pritchard. "So refinancing could really help out with your cash flow situation."
Here's an example of how lowering your interest rate by just 1.5 percent can change your monthly payment. Again, we'll use two $300,000 fixed-rate loans. One at 5.0 percent; one at 3.5 percent.

	Existing Mortgage	New Mortgage
Loan Amount:	$300,000	$300,000
Interest Rate:	5.0 percent	3.5 percent
Monthly Payment:	$1,610.46	$1,347.13

Conclusion: While every situation is unique, as you can see, a small percentage change in interest rate can make a significant difference each month in your mortgage payment. In our case, a 1.5 percent drop in interest rate resulted in a $263.33 savings every month. That's more than $3,000 of relief a year.
Pritchard cautions, however, if you have been paying off a mortgage for many years, make sure lowering your monthly payment by starting a new mortgage is worth it since it might impact your long-term goals negatively.

#3: Say Goodbye to Your Private Mortgage Insurance (PMI)

When you bought your home, did you make a down payment of less than 20 percent of the purchase price? If you did, you are likely paying private mortgage insurance (PMI), and getting rid of it could lower your monthly mortgage payment.
First, let's examine what PMI is. This is an insurance policy that protects the lender in case you stop paying your mortgage payments and default on your loan. Lenders usually require you to pay PMI when your equity (the difference between the purchase price of your home and the mortgage amount) is below 20 percent, according to a mortgage settlement guide published by the Federal Reserve, which oversees national monetary policy and banks.
The Federal Reserve adds that PMI can cost anywhere from 0.5 to 1.5 percent of the borrowed amount.
Now for the good news: You can get rid of PMI once you attain 20 percent equity in your home, based on the original purchase price, says the Federal Reserve. To cancel PMI, all you need to do is request it to be cancelled in writing. Regardless, when you reach 22 percent, the Federal Reserve says that federal law demands your PMI payments automatically stop - if your monthly payments are up to date.
Conclusion: If you qualify, getting rid of your PMI is a must-do. Don't wait until you build up 22 percent equity. If you're at 20 percent or more now, write that letter. It could save you a bundle.

#4: Ask for a Loan Modification

It never hurts to ask for something. Isn't that what mom always said? And if you're having trouble keeping up your mortgage payments, one alternative to refinancing could be to ask your current lender for a loan modification.
And just what is a loan modification? It's a change in your current mortgage terms, agreed to by your lender, to make it easier for you to make your monthly payments.
"It could change your interest rate. It could change your payments. It could change how often your payments are made. But you still owe all that money," she says. In other words, it usually doesn't change the lifetime terms of your mortgage. It merely changes the way you pay it off.
Pritchard agrees, noting that your lender may find a way to lower your monthly payments for a limited time. However, it's highly likely that you'll have to make up the difference later, he says.
"But if you've hit a rough spot today, it can be helpful until you can get back on your feet," says Pritchard.
Conclusion: Since it doesn't cost anything to ask for a loan modification, you may as well try. To do this, call your lender. But don't get your hopes up and remember that you may still have the option of refinancing to improve your mortgage terms.

#5: Get a Cash-Out Refinance

Perhaps your problem isn't that your monthly payments are out of hand but that you need cash for some other important life event: a son or daughter starting college, medical bills, or even to pay off some high-interest credit card debt. Getting a cash-out refinance could give you an infusion of money just when you need it most.
Never heard of a cash-out refinancing? Well, it's essentially the process of refinancing for an amount greater than what you owe on your home, and receiving the difference in a cash payment.
Sounds like a great way to get an influx of cash, right? Yes, it is, but it's an option that should be very carefully considered, because when you do a cash-out refinance, you own less of your home, says the Federal Reserve.
It's also good to note that there are many requirements to qualifying for this type of loan, and they vary by lender and borrower, according to Freddie Mac.
Conclusion: If you are considering a cash-out refinance, seek professional advice. And at a minimum, make sure the reason you're converting equity in your home for cash is well worth it.

Kris Allen Gets In Head-On Collision, Announces Wife’s Pregnancy On New Year’s Day

2013 got off to an emotional start for Season 8 "American Idol" winner Kris Allen, who was involved in a head-on automobile accident on New Year's Day. His wife, actress Katy Allen, and Internet-famous dog, Zorro, were also in the car at the time. According to tweets from Kris's mother, Kimberly Allen, Katy and Zorro are "pretty beat up" but doing fine; however, Kris broke his arm and will undergo surgery on January 2.

On the happier side, though, shortly after his accident, Kris used his non-broken arm to tweet that Katy is pregnant with their first child. "Thank you @ford for equipping me with a car that kept my whole family @katyallen @ZorroPup and the little one we have on the way safe," he tweeted. "Yes I got in a really bad wreck tonight and yes I'm having a lil baby. #gonnabeadaddy"

Fortunately for Kris, the broken arm was the only injury he sustained, so the situation could have been much, much worse. And thankfully, the future of his ironically/prophetically titled "Out Alive" tour, which begins January 8, is not in jeopardy. Although Kimberly tweeted that Kris "may not play guitar for a while" as he recovers from his operation, Kris clarified on Twitter: "Don't worry everyone I may have broken my wrist but the #OutAliveTour is still on." (Kris's brother, Daniel Allen, added on Twitter: "@KrisAllen s 1st words after setting his broken arm, 'I HAVE TO MAKE THE 1st SHOW GUYS, I HAVE TO MAKE THE 1st SHOW!!!' #DEDICATIONBRO")
Kimberly tells Yahoo!'s Reality Rocks that Kris is "in a lot of pain" but is currently at home resting. No further details of the crash are available as of this writing, but a hospital photo uploaded by Kimberly, featuring Kris making one of his signature goofy expressions (see above), indicates that the "Idol" cut-up's sense of humor was not injured one bit in the accident. Here's wishing Kris a speedy recovery and a happy, safe new year for the entire expanding Allen family!

La. cemeteries sinking, washing away : Sinking fate for some Louisiana cemeteries

LEEVILLE, La. (AP) — As a young adult, Kathleen Cheramie visited her grandmother's grave in a tree-lined cemetery where white concrete crosses dotted a plot of lush green grass just off Louisiana Highway 1.

Now, the cemetery in Leeville is a skeleton of its former self. The few trees still standing have been killed by saltwater intruding from the Gulf. Their leafless branches are suspended above marsh grass left brown and soggy from saltwater creeping up from beneath the graves.

"It was a beautiful place to visit," said Cheramie, 67, who lives in nearby Golden Meadow. "It hurts to see it now."

Cheramie's small family graveyard is among at least two dozen cemeteries across the southeast Louisiana coast that are rapidly sinking or washing away because of erosion and subsidence accelerated by the tropical punch of storms such as Katrina, Rita, Gustav, Ike, Lee and Isaac.

Local residents say 11 cemeteries in Jefferson Parish have repeatedly flooded since Hurricane Katrina. In Lafourche, Terrebonne and Plaquemines parishes, more than a dozen others have succumbed to tidal surge. Some have more than 300 gravesites.
Officials say not much can be done to save the cemeteries or the sinking communities that surround them, though some towns have tried pouring concrete slabs to build up the burial sites and hold headstones in place. They've also anchored above-ground caskets to the slabs to keep them from floating off.

"When I was a kid, you didn't see graves floating away and going under water," said Timothy Kerner, 53, mayor of the fishing town of Jean Lafitte, where schools, restaurants and homes have flooded at least four times in the past seven years.

Kerner said all 11 cemeteries in the area were under water during Hurricane Isaac, which struck Louisiana in August. Although many caskets had been anchored to concrete slabs, dozens still floated away, finding new resting places under and between houses.
In some cases, human remains became separated from the caskets.
"It's horrible," said Kerner, shaking his head as he flipped through photographs taken as officials recovered the caskets and remains. "It's sad, and it would be sad in any circumstance, but in this case you have families that have been here for 300 years, for generation after generation."

Kerner said his community has about 1,500 gravesites — some dating back to the early 1800s, when the town's namesake, pirate Jean Lafitte, used the bayous for smuggling.

Along the Louisiana coast, towns like Jean Lafitte watch the Gulf march closer each day, threatening wildlife habitats and a way of life.
Coastal Louisiana has lost about 1,900 square miles of land since the 1930s as canals dug for oil exploration allowed salty water to intrude into marshes and a succession of powerful hurricanes sucked marsh muck that protects populated areas out into the Gulf.
Archie Chaisson, coastal zone manager for Lafourche Parish, said about 90 percent of one Leeville cemetery dating to the 1800s has been swallowed by a wide bayou that empties into the Gulf, and two other burial sites have been submerged in recent years.
What's left of the bayou-side cemetery is accessible only by boat. Some headstones are barely visible above the water, and waves lap at the bricks and concrete surrounding caskets.
Chaisson said that as recently as 1920, the cemetery was several feet above sea level, surrounded by orange groves, cotton fields and cattle farms. Much of the ground has subsided to barely sea level, and during Isaac, about seven feet of land washed away in the tidal surge, he said. "The bodies just lay abandoned because there's nothing we can do for them now," he said.

South Lafourche Levee District General Manager Windell Curole, who also serves on the state's Coastal Protection and Restoration Authority, said saltwater from the Gulf is causing a crippling subsidence problem.

"We did not bury people in marshes," Curole said. "We buried them on high ground. This was high ground, and now it's subsided to the point of being wetlands and open water."

Curole said Louisiana's coastal erosion problems started with the cutting and dredging of canals for oil and gas exploration, which allowed saltwater to work its way into freshwater marshes. The damming of the Mississippi River in the early 1900s also prevented the river from re-depositing freshwater sediment.

"We created the problem, and now we have to be smart about fixing the problem," Curole said.

In Lafourche Parish, some of the earthen levees are as high as 16 feet to protect the communities within, and the parish is creating "apron marsh" by pumping sediment from inside the levee out to the broken marshes just beyond it for added buffer from the Gulf.

Curole said there isn't much that can be done to save communities like Leeville, which sits beyond the levee system and today is about two-thirds open water.

"It's so strange to not see any trees," Cheramie said, adding that she rarely makes the short drive from her home inside the levee system to the family cemetery just beyond it. Her grandmother's gravesite today is surrounded by saltwater-soggy ground and patches of dead marsh grass, with open water nearby. "It makes me feel sad."

Cheramie said that about 10 years ago, a concrete slab was poured to try to raise the ground and hold the cemetery's crosses in place, but with repeated hits from storms since 2005, sand and mud from the marsh have begun taking over the slab.

"It's just disappearing," she said. "It's a shame to say, but you stay away because it's too much. It's too hard. We're losing so much so fast, and it's out of our control."

Victim No. 4 in Jerry Sandusky trial doesn't support NCAA's sanctions against Penn State

On Wednesday, the NCAA called a federal lawsuit by Pennsylvania Gov. Tom Corbett over severe sanctions against the Penn State football program an "affront to all of the victims in this tragedy – lives that were destroyed by the criminal actions of Jerry Sandusky." However, one of those victims, so-called Victim No. 4 who was abused by Sandusky for years on the Penn State campus, has never supported the way the NCAA handled the case, according to his attorney.

Pennsylvania Gov. Tom Corbett gestures while speaking at a news conference. (AP)

Moreover, the attorney, Benjamin D. Andreozzi of Harrisburg's Andreozzi & Associates blasted the NCAA for trying to play the role of victim and never asking Sandusky's actual victims their opinion in the case. Perhaps most egregious, it assumed that the victims would find Corbett's lawsuit, but not the NCAA's actions, as an "affront." That allowed the NCAA to essentially use the real victims as a public relations tool without any knowledge of whether the assertion was accurate.
"Victim No. 4 was very disappointed when he learned of the NCAA sanctions several months ago," Andreozzi told Yahoo! Sports on Wednesday. "He was particularly upset the sanctions were so broad that they impacted people who had absolutely nothing to do with the abuse or the failure to properly report the abuse.
"The NCAA acted as if it were the victim in this tragedy, and failed to even take the pulse of the real victims before imposing its will," Andreozzi continued.
"I am not suggesting that PSU should have walked away with no sanctions or that the victims should have controlled PSU's penalty," Andreozzi said. "Rather it was a mistake to impose a broad sanction that gave little consideration to the people who had nothing to do with the abuse, and inexcusable to not at least consult with the real victims and weigh their thoughts as a factor in the decision-making process."
The NCAA declined to respond to Andreozzi's comments.
Victim No. 4 has not yet filed a civil suit against Penn State, in part because civil actions have been frozen by the courts. The possibility remains, however. The school has said it plans to work with Sandusky's victims to deal with damages.
[Related: NCAA's power at heart of Tom Corbett's lawsuit on PSU's sanctions]
Sandusky was convicted in June of 45 counts of child sexual abuse and is serving 30 to 60 years in a southwest Pennsylvania prison.
Victim No. 4 was the prosecution's star witness, the first called in the nearly two week trial in Bellefonte, Pa.
He was just 13 years old when he first met Sandusky in 1997 on the Penn State campus during a summer camp sponsored by the Second Mile charity designed to help at-risk kids. Victim No. 4 was poor and fatherless, and Sandusky became a constant presence in his life by using the allure of the Nittany Lion program to draw him in. Through the ensuing years he was repeatedly abused by Sandusky while being given unprecedented access to the Penn State team, where Sandusky was still the defensive coordinator.
Victim No. 4 was taken on road trips and bowl games, given sideline access during games and was a fixture in Penn State locker room. He befriended a number of Penn State players who were unaware of Sandusky's abuse of the boy.
Now 28 years old, Victim No. 4 forcefully detailed Sandusky's abuse and mind games and made a mockery of Sandusky's attorney, Joe Amendola, during cross examination. He later spoke at Sandusky's sentencing hearing and apologized to the younger victims for not having the strength to come forward sooner and stop Sandusky.

NCAA president Mark Emmert talks during a press conference. (Getty)

In July, the NCAA used what it acknowledges was "unprecedented" powers to bypass the traditional enforcement process and levy heavy sanctions on the Penn State program. That included a four-year postseason ban, a loss of scholarships over a four-year period, a $60 million fine and the vacating of all victories from 1998.
Corbett said Wednesday he will file a federal antitrust lawsuit against the NCAA questioning its authority to level the penalties and it's sidestepping of all normal procedures. Corbett said the Sandusky case fell outside the NCAA's realm of ruling on academic issues or extra benefits provided to athletes.
"The NCAA should not have sanctioned Penn State," Corbett said. "This was a criminal matter, not a violation of NCAA rules."
The NCAA said the lawsuit "appear[s] to be without merit."
Victim No. 4 however, who still lives in Central Pennsylvania, believes, like Corbett, that the NCAA's actions are punishing the wrong people.
"From former football players, who were friends and role models, to the 'mom and pop' PSU merchandise and food vendors living in the community, all were impacted by the NCAA's decision," Andreozzi said.

Man offers strangers furnished home for a full year

Tony Tolbert, a 51-year-old lawyer from Los Angeles, proves you don't have to be a millionaire to make a huge difference. Last week, Tolbert began lending his house to a formerly homeless family for a year while he moves back in with his parents.

Tolbert's story was profiled on "CBS This Morning." The Harvard-educated attorney explained that he was inspired by his father's generosity when he was younger. As a boy, Tolbert's father frequently let strangers with no place to go stay in their house. Years later, Tolbert decided to expand on the idea.

When Tolbert told his mother, Marie, about the idea, she said, "Have you lost it?" Tolbert insisted he hadn't. "You don't have to be Bill Gates or Warren Buffett or Oprah," he said to CBS News. "We can do it wherever we are, with whatever we have, and for me, I have a home that I can make available."

[Related: Act of kindness turns into free coffee for hundreds of customers]

Tolbert hasn't met the people who are moving into his home. He told officials at the Alexandria House, a homeless shelter for women and children, that he wanted to loan his home to a family in need. Felicia Dukes and her four children were the lucky recipients. Before moving into their new home, Dukes and three of her kids were sharing one room in a shelter. A fourth child wasn't eligible to join them. Now, they are all together. "My heart just fills up and stuff. ... I'm just really happy," Dukes said.

Tolbert believes that, in his words, "Kindness creates kindness. Generosity creates generosity. Love creates love. And if we can share some of that and have more stories about people doing nice things for other people and fewer stories about people doing horrible things to other people, that's a better world."