Not sure how this works as Countrywide bank is offering 5.45% on their CDs so how are they offering 5.25%?

“This is really great news for the Hornbeeks,” Barrett said. “Their mortgage would only go up about $1,000 a year based on the new interest rate, but it’s something we all agree that they’ll be able to manage in the short term. And, as we’d hoped, it will give them some time for the market to recover and for Mike’s salary to increase.”

What happens when they have to pay interest and principle in 3-5 yrs and can’t afford that payment? Are they going to renegotiate yet again?

Looks like they are getting into the same cycle again, trying to mend things for the short term and speculating that they will figure something out down the line.

The bottom line is that given this family’s financial picture they cannot afford a $440,000 property!