Refinancing Advice

From: jack law <jlaw@pop.kis.net>
Subject: Refinancing Advice
Date: Tue, 4 Aug 1998 20:34:15 -0400

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Dear Listmembers


I am sure that many of you will offer me some helpful advice.  I am
trying to decide whether I should take some money out of my house.  My
wife and I (combined income 100k) have a fifteen year mortgage @ 6.75%.
 We owe $85,000 with about ten years left to pay.  Our house is
currently worth about $175,000, and we have not seen any recent
appreciation because of extensive new development in our area.  Both of
us are in stable jobs which should not show great fluctuations in
income.  We have pretty sound financial (retirement and insurance)
arrangements except we have not saved any considerable amounts for
college for our three children (ages 15,12, and 9).


My question is should a refinance ( at around 7%) at a thirty-year
mortgage and invests the cash (approximately $40,000) in a mutual fund.
 The new mortage would be around $135,000.  The advantages that I see
are:


1. Possible greater appreciation of investment over time to put toward
college for kids.

2. Larger tax write-off which would be helpful.

3. Lower monthly mortgage payment - we plan to stay in the house at
least 8 years.


The disadvantages:


1. More interest paid to the bank.

2. Home equity would not be available for future use.

3.  Mutual fund holdings would work against my kids when applying for
financial aid, scholarships, etc.  


What am I missing?  Please advise on whether we should refinance.


Thanks.  Jack  

		Frederick,MD






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