[s_wilwerding]

Mortgage rates are getting awfully low - I currently have my first mortgage with Wells Fargo at 6.25% for 30 years. 30 year rates are now at 5.25%, which would save me about $100 a month.

My question - I also have a second mortgage with a balance of about $25K that is at 7.25%. I could re-finance my mortgage and take the extra $100 a month and put it towards my second mortgage - this makes sense from the perspective that I should be paying down higher interest first.

Or, I could refinance my 30 year first mortgage to a 20 year mortgage, and my monthly payment would stay about the same. I like the idea of paying off the primary mortgage after 20 years - along the way, I could eventually lump in my second mortgage with my primary, or just pay the second off in a lump sum.

I like the 20 year idea, but on the other hand, 5.25% for 30 years is awfully cheap money, and in this economic environment, having an extra $100 a month might not be a bad idea.

Thoughts?

Addendum: WF is offering re-financing with no closing costs, so re-financing costs will likely be minimal or non-existent.