Wife and I got married, tried to sell her townhouse, ended up renting it out. Our house I have been renovating for years has enough equity and is finally in a state of completion enough that I can refinance it. Appraisal gave us 209k but market value is prob near 250k. balance on 6% 30 yr fixed is 109k. Balance on the townhouse and value are both about 90k. The mortgage broker I am working with keeps pissing me off, but it looks like we will be able to get a 15yr fixed @ 2.875 for 152k. I have no idea why 152k is the most we can do, something to do with points and lender credits and all sorts of doublespeak which she tries to hide a 3k increase in principal of the loan, and a slightly higher rate than I see from many companies on zillow. Anyways, going from a 30 yr to a 15 yr is a given, the monthly cost is almost the same if we do not take any cash out. The pat I am hesitant about is taking the additional 40k out and paying it towards the townhouse rental we have. That mortgage was done though BB&T under some special 100LTV plan that blocks usage of any current loan modification programs from the govt. It is 5.5% fixed 30 year. Is it smart to move 40k from that loan to our home loan at a 2.875% rate? On paper it looks good to me, 5.5 -> 2.875 = free 2.6%. In practice it means our monthly bils will go up some as we are forcing ourselves to pay ourselves via the larger payments towards the principal. We do not have any other debt ( cars, credit cards, etc) other than about 20k in student loans which are at 2 or 3 something %..
Other options for the money could be considered, such as buying more rental property, but I would really psychologically like to get down to a single mortgage, and I think paying off about half of it would help kick stat us into paying it down as quickly as practical ( without tapping into maxing out 2 roths and my 401k each year).
So I think it is a good idea, and it is what I plan to do / want to do, but I want a sanity check to be sure I am not "being my own worst enemy"