oh boy

I usually cannot give people advice like this since I am not that sharp about these things.

Here is my feeling:
1. It is very tough to get a loan from banks in current time. If you can, get it. So I would not get money out of my primary resident to pay off these loans. It is very lucky to own a house outright now. So stay with it and don't take any money out, not even line of credit.

2. 4-5% is still too high for rate in today's deflationary environment. I don't think we will see inflation in next 3-5 years. FED's minutes today clearly shows that they are not going to raise interest rate anytime soon (not this year, not next year). So I will go with 5 yr ARM for about 3.3%. In next few years, you can use saved interest or positive cash flow to pay down more principles rather quickly. Then before rate adjusts, lock in 15 yr fixed or pay off.

Just my 2 cents.