Is this a good time to refinance my home? (AZ)?

Question

We bought our house on 7/11/06 for 123,900. we used 100% financing of about 80/20.

our first loan is now $99,052.98 and 7.85% fixed.
our second loan is now $24,570.94 and 10.85% fixed for another 18 months before it goes ARM.
the total mortgage is now $123,623.92 .
our total monthly payment is $772.16 and $233.18 (respectivly) for a total of $1,005.34 a month.

we have primary and secondary goals with refinancing.
1 - Maintain/Lower monthly mortgage payments.
2 - lower interest rate and avoid the future adjustable.
3 - pull out money for what appears to be a good investment (hoping for 13K)

if demographics are a factor then:
Glendale AZ, 85301
534 Sq ft.
1/1 bed bath
beautiful inside and out
added an aluminum 8x10 outdoor shed after we bought the property.

previous apraisel at time of purchase $130,500

Any advice or suggestions you can give will be welcomed. The market around here is picking up and we hope it'd be worth it to refi b4 fed rates go up.

Answer 1

There are a lot of variables here. My advice would be to go 15 yr fixed (combine both notes). The payment there would be 1010.24. I know it doesn't save you money month-to-month, but it will save you a lot in the long run.

A 30 year fixed (currently 5.81%) is 722.49 for $123,000.
A 15 year fixed is 1010.24.

If it your goal to pull equity out of your house for your investment, then you name, Flat Broke, will apply to you for a long, long time. Pass on the investment until you can afford it. Leave teh equity in your house, refinance at 15-year fixed, and get started saving for future investments.