I think it’s a good idea in general

to roll a higher debt into a lower interest rate, but you’re going to be too close to the bone on the other house. Financing more than 80% puts you into PMI territory. Plus there’s a risk of going underwater. You might be able to refinance one or both of those houses though, those rates sound really high.

Wow, that really stinks

MN doesn’t do that, just the $2800 closing costs. I thought it was bad enough that we’ll have to pay $475 to close the HELOC we never used in order to refi (we were considering buying a house with my SIL and BIL last year and wanted to be able to use our current house’s equity for a down payment and sell afterwards. Our housing costs would have plummeted afterwards because of shared costs, but we had no intention of using the HELOC unless we did that. I don’t lose too much to the Stupidity Tax, but that’s where I’m putting this one.)

We just locked a 3.75% 20 year mortgage in last week

with closing in a month. We have 26.5 years left on our 30 year current mortgage at 5.5%. With the interest rate drop, our monthly payment will only go up $10 but instead of $175 going towards principal monthly, it’ll be $375. The closing costs will be paid for in just over a year.
If you’re asking whether you should take cash out, I’m pretty sure Dave would be opposed.

We’re probably going to finish steps 4 and 5 this year, so I was planning on putting more money into the house anyway. I considered a 15 year at 3.25%, but the extra $140 would put us at more than 25% of our takehome pay. I crunched the numbers and if we put that extra $140 in monthly even while keeping the 20 year mortgage, it’ll be paid off in 16 years, so I figured it would be better to maintain the flexibility of the 20 year.