Where did you find that rate? I am shopping around. Sounds good!
Try your local credit union. I'm doing a 15 yr refi at 4.5%. If I was buying a new house, the rate would be 4.375%.
You don't have to reduce the term of the loan to save money on the interest. You can take out the 15 year loan and then make extra principle payments when you can afford it. The interest savings effect is the same. The shorter term will sometimes come with a lowere interest rate, but not always.
I took out a 15 year mortgage at 6.5 in 1999 and paid ahead. That put me on track to pay off in 7 years this year. But when interest rates dropped to below 5, I refinanced for another 15 year period at 4.8% (0 points) and dropped my payments by $300 a month. The overall interest went up for the life of the loan, but with compound interest on $300 additional savings dollars a month, I come out ahead. Plus, I can still pay ahead on the loan if I want to rid myself of debt in 8-10 years instead of putting the money into investments. That's the good thing about it, the choice is there.