Refinance - shorter term, or cash out? (loan, real estate, mortgage calculator)

[macroy]

I'm just playing around with mortgage calculators... and realized that I can shorten my term to 20 years or take out approx. 75K extra without changing my payments too much (I'm only 1 year into my current loan).

What would you do.... go debt free sooner? Or take out some cash? Is it even smart to borrow a weak dollar?

Not sure if this makes any difference... but I have no other loans (CC's, cars, etc..).

[KCfromNC]

Do you have a pressing need for the $75K? Do you have a plan to turn it in to more than $75K + 30 years of interest? How does $75K of borrowed money in a taxable account mesh with your investing goals and plans?

One option is to take the 30 year loan but pay it off as if it were a 20 (or 15, or pick whatever term you want). If everything goes well, you only pay a bit extra in the higher 30 year rate. If something pressing comes up, you have the option of paying the true 30 year payment - this frees up some cash at the expense of taking longer to pay off the mortgage.

There's been lots of discussion on this - search for 15 year mortgage.

[sean98125]

Don't borrow against the equity in your home if you don't have a dire need for the money (which it sounds like you don't).

[MotleyCrew]

Why would you want to be $75K further into debt? You will not earn more that the % the bank will charge you and I feel stocks are risky right now.
We were so relieved to finally own our homes free and clear. The last equity boom was very tempting with no shortage of con artists telling us to draw on it and invest it in stocks or more real estate. That would have been a huge mistake. Glad we did not listen to them.