We want to refinance; currently at 6.75% on a 30-year fixed. We are unsure how long we will be in the house but assuming at this time we will want to move within 7 years. I am looking to retire in 3 years. We have a relatively low mortgage ( 130k remaining/16 years left on loan). I have been putting off refinancing, but want to retire with as little as I can left to be paid on this home.
I know in refinancing we will be paying off less of the principal. Would it be more advisable to do a 10-year fixed given how low the rates are now and try to pay it off more quickly (7 years)? I realize of course our monthly payments will be higher.