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ellemae, you should always go for lower interest rate, provided you will recoup your refi costs within the life of your new mortgage. Another provision - if this is a similar type of product (fixed, not ARM).

If you are concerned about longer term - just continue making the same payments as before, and you will pay off your new mortgage much sooner.

It's fixed - never had an ARM. But if I pay the same amount I have been, I'll pay it off sooner and save the $1k of refi cost.

Try a broker rather than the WFC in house knuckleheads. They are going to be more knowledgable and more competitive. The kids they've hired on at the call centers for WFC can only sell WFC products, go to a solid local broker that can offer competing products, and id wager they can offer you a better deal (even thru WFC) than WFC will/can offer

And of course you should take advantage of these low rates. I re'fi'd from 5% down to 3.5% with no costs/fees, and now I'm saving almost 200$ per month. The old mindset was to pay down the debt ASAP so you won't have a mortgage any more, but what with the current state of our financial world and borrowing the money at such cheap price, I prefer to set aside that extra money for a winter vacation fund. To each their own, but I for one feel like I get more bang for my buck taking what used to be interest payments on my house and using them to take a nice, long, paid for vacation come january

Read all the mice type. Be sure you keep a barf bag handy.

Lots of marketing reasons to get you to refi: usually people will borrow more money when they refi and that adds to the kitty, or consolidate from other places to save interest. They've got formulas to follow on the call lines.
Wanna mess them up? Tell them you own 50 acres of farm and watch their interest rates double and their offers evaporate. Their formula is to take advantage of people with a house, not work with legitimate income producing property. For that, they get out the thumbscrews.
I refinanced on a revolving credit account and got nearly the same interest rate, but it's on a loan that is down to 25% of the value of the place. One bank tried to nail us with a $1200 charge for the appraisal, when it clearly stated on their website that appraisals were free.

The only way to get ahead, in your current situation, is to use the reduced interest to reduce the term of your loan.

If you only have, say, 8 years left on a 15-year-fixed, you would be stupid to refinance to anything longer than a 7-year. Race through that interest clock and get out from under its grip as quickly as possible.

A buddy at work owed 20 years on a 30-year. He found his interest savings and higher earnings would let him refinance at a lower rate, in a 10-year-fixed. He'll save $60,000 just from the reduced time.

It hurts equally terribly to take the 20-year and refi for a new 30-year.

WF still owns the loan from what I can tell. I have plenty of equity and it seems like they're desperate for new loan commissions.

I'll save the $16k over the years if I keep adding the $ onto principal, so I'm not sure that I see the benefit. I'm mulling this one over.

Auntiegrav says

One bank tried to nail us with a $1200 charge for the appraisal, when it clearly stated on their website that appraisals were free.

I forgot to mention: this was the original bank holding our mortgage, and when we applied for their NEW, LOW INTEREST RATES, FREE APPRAISAL!! loan, they refused to give us a mortgage because it was a farm, and then sent us a bill for the appraisal that THEY contracted during the process.
Fucking bankers. You can't deal with 'em and you can't shoot 'em.

Maybe a few more numbers would help:

If your current loan is $1100, the "new" loan will be $1000, then over the course of a year you will save all of the refinance costs.

If your plan is to pay $100/month EXTRA, then your principal pay down will look something like this:
Year 1:
+$1200 extra you paid with your extra $100/month
+$1200 extra you saved by having a lower interest rate
-$1200 for your refi costs

If you stick with your current mortgage you would have paid down an extra $1200
With the new loan you would have paid down the $1200 as well.

Year 2:
+$1200 extra you paid with your extra $100/month
+$1200 extra you saved by having a lower interest rate

If you stick with your current mortgage you would have paid down an extra $1200
With the new loan, you would have paid down $2400

Over 10 years:
If you stick with your current loan, you've paid down an extra $12000 in principal
If you refi, an extra $22800 in principal.

Rrregardless of how long your current loan is, vs the new loan, you will pay it off faster with the extra $1200/month in principal pay down.

A careless coworker left in the network printer a printout of the email chain he had going with someone at a bank about the docs needed for his cash out refinance in The Fortress.

It can be challenging to Keep Up Appearances.

Really, that kinda stuff ought to be done at home, not the networked computers at work.