Yeah, take a look at your closing costs before you go anywhere. In addition, here are a couple thoughts:
1) Assuming you'll start with a $95k balance on the new mortgage, you'll go from paying (roughly) $5400/year in interest down to $3360/year. Your total monthly payment would go up by about $100, but you'd be saving almost $200/mo in mortgage interest. That's a lot.
2) Conventional wisdom says that if you have extra cash flow, you'll be better off investing rather than paying down your mortgage faster. In your case, however, because of the drop in interest rate, you'll be better off refinancing.*
3) The other thing to consider is that investing that money (rather than paying down the mortgage) keeps it liquid and more easily available in case you need access to it.
My opinion: run, don't walk, to refinance. There's a boat load of savings.
* As an exercise, I threw together a *rough* spreadsheet that explores your exact scenario. (see attached)