Paying Off That Dream House When Evelyn and Paul Peters were "house hunting" five years ago, the mortgage rates were pretty high. The fixed rate on a 30-year mortgage was 8.75% while the 15-year fixed rate was at 8%. After walking through many homes, they finally reached a consensus and decided to buy a $200,000 two-story house in an up and coming suburban neighborhood in the Midwest. To avoid prepaid mortgage insurance (PMI) the couple had to borrow from family members and come up with the 20% down payment and the additional required closing costs. Since Evelyn and Paul had already accumulated significant credit card debt and were still paying off their college loans, they decided to opt for lower monthly payments by taking on a 30-year mortgage, despite its higher interest rate. Currently, due to a worsening of economic conditions, mortgage rates have come down significantly and the "refinancing" frenzy is under way. Evelyn and Paul have seen 15-year fixed rates (with no closing