Refi or Roll the Di?

With rates slowly on the rise, and home prices starting to level off, we are left with a conundrum. My family and I bought a home in Tierra...

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With rates slowly on the rise, and home prices starting to level off, we are left with a conundrum.

My family and I bought a home in Tierra Shores nine months ago. At this time we have a plethora of equity in our home, and are planning to put between $15K and $20K back into it in the form of a back yard, some tile work, etc.

When we purchased the home we were able to negotiate the builder buying down our 5/1 Arm interest rate to 4.5% (no pre-payment penalties). Obviously that means we have another 4 years and three months until our rate adjusts.

Should we refinance our loan to a more conventional loan while the rates are still relatively low and take out the money we need? Or should we roll the dice on future interest rates, enjoy our low payment for the next four years, and take out a home equity line?

What would you do? Why?

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