Oh yeah, they already collected most the interest (like I said extremely stupid). The 5000 is what would be paid in interest over the next 4 years until both are paid off, averages saving 100 a month in interest. Or using 12000 to pay them down to what they're worth and refi them would free up a couple hundred a month, and save a couple thousand in remaining interest.
HELOC could be an option since we could repay it fairly quickly is need be. Would the benefit be not losing the first two years of interest we already paid, and two years of time for that matter. We've paid $20000 in interest which is what the 65000 cash out would cost, averaged out over 30 years, about $640 a year. HELOC would just be interest until paid down? So say we got 50000 in heloc at 5% for 5 years, thats about $11000 interest. Which is almost half of what we'd lose in refi, not including time. The interest payments over the two 30 year mortgages are exactly the same.
