Am I better off refi, saving, or accellerating mortgage payoff?

I currently have a 30 year fixed mortgage @ 5.75 (3 years into it, balance around $270k). Payment if $1678.

I have a couple of options - I can re-fi to a 15 year @ 5.15, but the fees are about $8k (which they would roll into the mortgage), and new payment is $2200.

I intend to be in this house for at least the next 10 years - my job is as secure as it can be in this market.

My question - should I re-fi, just apply $500 / month to the existing mortgage and pay it down earlier, or take the $500 /month and put it in a 5% GMAC Demand Notes account?

For all of those Dave Ramsey fans, yes, I have >6 months emergency fund, a chunk of money for my kids college, a healthy retirement account - I'm looking for answers or options that perhaps I haven't thought of - and how to best do the break-even on the % decrease, fees or other ideas.

I would prefer answers that have some basis in financial astutement.

I'm in my mid 40's, my kids are 6 and 9 - 15% goes into retirement, IRA fuly funded each year.

If you are maxing out all of your retirement vehicles then I see no reason why you shouldn't accelerate your mortgage. Putting the money into the home is probably more safe and lucrative, because you are knocking off principal with the extra cash. Not knowing your age though it's kind of tough to really say which option is best.

Yeah with that mortgage I would refi to the 15-yr even with the fees. Staying for 10 years is what makes it worth it in my opinion. Because over the life of the loan, even with the extra $500 you will pay a lot more interest. You will be out of your loan quicker, or if you sell you will have more equity in year 10 of the 15-yr than you would the 30-yr. Your loan is beating the GMAC anyways so you would be losing potential capital. It seems like you are set since you already have money set aside for your children. Because usually it's best to take care of you first, which it looks like you have done. I would focus on the house because in the long run, that measly $500/mo in the GMAC isn't going to beat the equity you will have built in 10 years.

cut to the chase -- yes do the 15 year refin!!!