[yagersmom]

Hello. Please help. We currently have a 1st mortgage with a balance of 233,000. The loan is a 30 year fixed at 5.5%. The home was purchased in 2003 with an appraised value of $300,000. The home is now valued at $450,000. We are about to sign (in 2 days) on a cash out refi and we are having some concerns about whether or not it is the right thing to do. The new loan would be $320,000 for 30 years fixed at 5.75. We would pay off our current first and would receive about $96,000 to pay off debt and do some home improvement. We have $25,000 in credit card debt ($8k at 0% until 12/05 and $17k at 2.9%) and a personal loan of $50k from family (at 0%). We had planned to pay off the above $75k and use the remaining $20 cash for home improvements. The best cash out refi that we can find is at 5.75% for 30 years. This will increase our monthly mortgage payment about $300. It will be nice to be virtually debt-free but we are second guessing our choice now and wondering if this is the right thing to do. Please let us know what you think would be in our best interest. By the way, we do not plan to stay in this home forever - more like anywhere from 2-7 years.

Thanks.