I wish I could refinance - but our house is non-standard for our neighborhood - original 1950s tiny ranch in a neighborhood of 800k+ mcmansions - and when we tried to refinance a year ago we got told we couldn't get a conforming appraisal because there simply are no comps in our zipcode - and the nearest comps in the next town were all foreclosures.
Good news is we bought it after the market crashed, and paid a little less than what the last empty lot on the street sold for in 1999 - plus the house is in surprisingly good shape. Needed some plumbing and insulation upgrades, but otherwise solid.
The side income is from writing custom cover letters. I didn't used to get many clients, but I decided to start sending out some marketing letters to staffing agencies, and got a couple firms to send me regular referrals. I spend about 5 hours a week on this. It's a great side income at least while so many people are unemployed - plus I love it when I hear they get hired. And it's a good chance to keep my writing skills polished.
Thanks for the advice - I was pretty sure the mortgage was a better bet than it seemed because of PMI.