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[quote=Anonymous]OP here: thanks for all the responses even though I was really seeking advice on whether given our finances it would be possible to refinance.

However, let me respond to some of the points made as to our financial viability given the circumstances outlined.

The rate of return we have earned on our investments during the past five years has averaged about 6% ...... and this is without taking any undue risks.

Assuming that we stay in our residence for the next ten years - not our intention, I hasten to add - the amounts owed on the first mortgage would $400K, the HEL would be $48K and let us assume the HELOC still has a balance of $250K. So the total indebtedness would be approximately $700K. At that point, even assuming the value of the primary residence remains at $1.6 million, the equity we would have in the house would be $900K.

If I purchase an annuity for $1 million (out of the $1.2 million we have in savings) today through - say Fidelity - with full annuity payments to the surviving spouse, we would receive approximately $4900 per month as long as we live. A lot more than the $3500 monthly that we are currently drawing out of savings to meet our expenditures.

We could of course sell our winter condo and realize funds, if we need to do so.

Our utilities, yard work, house cleaning and general mtce runs about $1000 per month.

We currently pay very little in the way of federal and state income tax because of the mortgage and RE tax deductions.

We each have life insurance of $500K ....... so if either of us should die, the surviving spouse could pay off a substantial portion of the debt on the house.

We live very well but through a combination of being careful with money and life-style choices, our monthly outlays on expenses not specified above is quite modest. The only major expense we incur is taking two or three vacations a year, usually a cruise annually and a visit overseas. In the process we have traveled quite a bit ...... something we both enjoy doing.

I am not a financial advisor but my background is in finance. I have never been fearful of debt per se as long as we have the capacity to service the debt. We don't lose any sleep because we have a substantial mortgage since we can make the payments effortlessly.

The one point that has been made that is entirely valid - and it is something that we have thought about - is what would happen if one or both of us became incapacitated and required long term care. I am not sure I know the answer to this but given the cost of care, I am not sure that any amount of money, within reason, would offer one the assurance needed to deal with that  contingency. I have looked at long term care coverage but have not found a product that I am comfortable buying.

Just some thoughts ...... I hope I don't come across as defensive ...... because that is certainly not my intention. I just wanted those who offered cautionary advice to be aware that there is an element of reasoning in what we are doing.[/quote]

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