If you still work, have income, and can qualify for a refi –and if you can lower your rate to below 4%, which is likely — you should definitely refi. BUT — do not stretch out your mortgage for another 30 years! Instead refi to a 15-year, or even 10 year loan if you can afford the payments. It will be good to be out of debt as soon as possible. The shorter -term loan will cost a bit more per month, but it’s nice to be on a definite schedule to own your home free and clear — especially if you want to continue living there in retirement..
On the other hand, and as I write I think about this alternative, you might want the flexibility that paying extra on your current mortgage gives you– just in case you cannot afford higher fixed payments down the road. Ask your current servicer to give you an “amortization schedule” based on your current payment, plus the $300 extra you are paying each month to principal. (And this is a good time to make sure they have been applying those extra payments to principal!) Then you might want a lower rate, but a longer-term –just to give you a lower fixed monthly cost which might be more manageable when you no longer have an income —
I know this is a bit confusing, but there are two sides to this answer — and if you don’t understand the alternatives please write back. Check out refi rates at GuaranteedRate.com and/or QuickenLoans.com.