To refinance or not to refinance…

To refinance or not to refinance…

We've got a decision to make, and I'm not sure what to do. Since many of you have been in similar situations, I wanted to hear your opinions!

Background info: We moved up to OH for a job 8 months ago. We owned a house in NC, but since it was either pay for a mortgage and a rent or a mortage and another mortgage, we decided to take out a bridge loan on our house in NC to purchase our house here in OH. Basically, we have a mortgage of $97,000 on our house here and about $90,000 in equity, depending on the market, of course. We have a large loan on our house in NC, but we have sold it and closing is in the next few days, depending on how fast the closing gets pushed through.

Because of the downfall in the market, we sold our house for about $50K less than it was worth a year ago. So we'll be needing to come to closing with approximately $8K-$10K. Also, when we bought this house in OH we were aware that the house would need a new septic system to comply with local laws (we offered quite a bit less on the OH house because of this.) We expected to have some extra money from the sale of the NC house to cover it, but now we won't, so we have to come up with $15K - $20K to do that immediately, before we get taken to court by the county. :P (Well, first thing in the spring, anyway. We can't dig up our yard when the ground is frozen and under a foot of snow, lol)

Finally, we have credit card debts (from a failed business, mostly) we are aggressively paying off and my student loans.

In summary: Mortgage: $97,000
Extra from other mortgage: $8000-$10,000
New Septic: $15,000-$20,000
Student Loans: $20,000
Credit Cards: $16,000

We make about $2120 a month after taxes. We have about $900 left after monthly expenses (including the mortgage ($750), utilities, and food/gas/etc.

Okay, now the question part. We plan on refinancing - our mortgage is currently a 6.5% 7-year ARM, which can be a little scary. It's also interest-only, which I don't like, but we've been putting money towards principal every month in order to pay it down.

We talked to our bank today, and he was able to quote us 5.65% on a 30 year fixed or 5.5% on a 20 year fixed. The 30 year fixed comes out to be $200 more a month if we add the septic and the other mortgage in (for a total of $130,000.) That's not too bad, considering the fact that it's not an interest only loan.

But the crux of the matter: My husband wants to refinance the credit cards into the mortgage. Of course I said "Absolutely NO way am I going to be paying off those cards over 30 years!" But he pointed out that since we've gone credit-card-less and we won't be charging more stuff, we can continue to aggressively pay down the mortgage, and pay the "Credit card" part of the mortgage at the same rate. The interest rate would be much better, and it would be fewer cards to pay each month.

However, our plan was to have the cards paid off in the next year and a half. But if we refinance, with the extra debt load, we may not be able to pay them off as quickly.

I hate the idea of consolidating the cards into the debt, but it's actually making sense to me. We have an appointment Friday to crunch numbers, but I'm fairly sure the lender will be fairly limited as to how well they can calculate how much interest we'd pay on the cards if we left them versus if we refinanced them...

Ideas, opinions, well here's what I'd do's, or tl;dr? :) I really just want to see what other people's instincts, experiences and personal opinions are. :)
New here

New here

cherry tree

cherry tree

My first harvest!

My first harvest!

I built my raised bed for my Strawberries

I built my raised bed for my Strawberries

Backyard planter

Backyard planter

Ten Minute Trellis

Ten Minute Trellis