Refi advice needed

I need some advice on a possible refi. Here's my situation:

Current Mortgage: $226K (5.5%, 30-year fixed, currently 5 years into it)
HELOC: $28K (used to finish our house which was partially unfinished when we bought it)
Student Load: $28K (6%)

We have 2 1/2 year old twin boys and my wife won't be working full time for another 2-3 years. Aside from the above summary, we don't have any other debts and are responsible credit users with a score of around 775. I contribute 15% into my 401K and have done so for 15+ years. We have our twins enrolled in a state guaranteed tuition program.

Right now, we pay $1850/mo for our mortgage, $440/mo for her MBA student loan, and $175/mo for the HELOC. If I refinance and consolidate these debts, our monthly payment could be anywhere from $1450-1650; saving us up to $750 each month. Given the fact(s) that we're likely going to live in our house for at least 3 more years and that my wife won't be working much until then, is this a wise financial move? Are there any drawbacks to this? I'm an outside medical device salesman, and while I do pretty well, my career is unstable. The monthly savings "seem" like a good idea, as they'll allow us to ramp up our liquid savings and continue to dump money into retirement and our kids tuition.

What scares me is that I'll be borrowing $280K to pay everything off; leaving only $120K - $150K in remaining home equity.

Thanks in advance.

Having 120-150K of equity in todays market sounds pretty solid to me. If you don't have much liquid savings though and your income is not stable you should be focusing on that.

The downside of refinancing is if you are extending the term. If you don't want to have a mortgage when you retire or your kids go to college then you need to be looking at mortgage terms that coincide with those goals.

The downside of refinancing is if you are extending the term. If you don't want to have a mortgage when you retire or your kids go to college then you need to be looking at mortgage terms that coincide with those goals.

See, that's where I'm at in my mind. The thing is, our situation probably won't allow for that. I'm 41 years old with 2 1/2 year old twin boys. My wife is 9 years younger than me, and will "someday" use her MBA to bring in a solid wage. For now, the house we live in is not our dream home. We'll purchase our home for the long haul in another 3-4 years when our kids begin elementary school. At that time, I'm going to be 45 years old, and it's highly doubtful that I'll have any mortgage paid off in 15 years.

You pointed out the key issue that I've been obsessing about the most. For the next 3 years (while my wife is out of the work force), we'll be relying on my outside sales income. It's a good living, but it's unstable. It would be "safer" to consolidate our debt and lower our monthly payment, but I would hate to do something safe if it's not also a smart business move. We've only got $40K in liquid savings, and I would like to focus on cranking that up in the next 3 years.