The Refinance Is On (again)

We have gone back and forth on whether or not to go ahead with the refinance, and I think we are going ahead with it after all.

We are refinancing to a 15 year mortgage, so the loan payoff date will be 1 year (actually 9 months) later than if we didn't refinance - but we are hoping to pay off the mortgage early in either case.

When we refinance, our new mortgage will include the amount of our current mortgage plus the amount of our home equity loan. Because of this, our actual mortgage payment will be about $30 more than it is now - but we won't have a home equity loan payment to deal with. (If you take into consideration the minimum payment on our home equity loan plus our current mortgage payment, the refinanced payment will be $44 less.)

Part of me still feels unhappy about making the home equity loan a long term debt - meaning that by rolling it into our mortgage, we will take 15 years to pay it off (turning a short term debt into a long term debt). But the truth is, we are currently only paying the minimum on this debt right now (to stockpile cash savings) - so it is questionable how quickly we would pay it off.

By refinancing now we will effectively be "debt free except for the home mortgage" - this will allow us to move on to the next step of funding our fully funded emergency fund (which, because of the current bad economy, is what I have really been doing for the past few months, instead of putting that money to our last debt).

So, if everything goes smoothly with the refinance, my projections show we could have our Fully Funded Emergency Fund in a little over 2 years. Then, we can FINALLY move on to saving for my daughter to go to college (she's 12 right now - so we are very behind!).