As mentioned, American funds tend to have higher fees. If you search for your fund on morningstar.com, the "Expenses" tab shows the fees. While I might have looked up a different fund, the one I see there charges 0.65% expense ratio (per year). Vanguard Total Stock Market charges 0.05% per year when you have $10,000 minimum or use the ETF class.
Capital gain has nothing to do with the mortgage - it's a price comparison between when you bought and when you sold (minus commissions - often 5-6%). In any event, there's a $250k exclusion from capital gains if you've lived in the house at least 2 of the past 5 years.
I don't follow why you're selling your current house to buy another one a year from now. Will the next house be complicated by your girlfriend maybe wanting to pay mortgage / gain equity? Then if things don't go as smoothly as you expect, it's a more difficult problem than a house you own 100%.
You didn't mention if your work offers a 401(k) plan. Invest to the match.. and if you have extra money and pre-tax contributions make sense, maybe up to the annual limit. Did you already contribute to a Traditional or Roth IRA this year? Might consider that as well.
