Is this smart move?

[cool9026]

What is the name of your state? VA

I bought this property in Aug/2005 at $262,000.
I did not have enough money for downpayment and had to have two separte loans as follows.

1st morgage:
amount: $203,450 at 6.25% fixed rate for 30 years

2nd morgage: line of credit
amount: $39,300 at varying rate(usually %9-%10)

So in sum, I have been paying around $1,850/month including taxes and insurance, etc.

Since I hear that the rate has decreased, I look for refinancing and the best offer I got today is

Consolidated one loan:
amount: $252,650(pay off the current morgage+ closing costs) at 5.75% fixed rate for 30 years ==> The new monthly payment would be $1,708/month

It seems that the rate is lower and so is the monthly payment. But I am not quite sure if it is worth doing it because the term is actually extended from 27.5 years to 30 years.

What do you guys think on this offer?

[nextwife]

It's about a $142/mo difference. What is it costing you to GET this loan? How long do you expect to stay there?

Any prepayment penalties on either side? What are the BACK end charges your servicer will assess when you get out of your current loan as to fees to so a payoff/ fax a payoff/ close your escrow account? I've seen back end fees be as much as $500.

The term is not that big a deal - you can voluntarilly kick in an extra $25/mo or so to shorten the term by accelerating your amortization (if no prepay penalty). I ALWAYS bring an extra $25-$100 when I make my mortgage payment to go toward principal, and my bank recalculates the new balance at each payment.