Here is our situation:

We are not in any financial trouble. We purchased our home 2 years ago and have a 6.35% interest rate on the first mortgage (ARM adjustable at the seven year mark) and a 7.5% interest rate on the second mortgage. Our second mortgage is for 21,000 and our first mortgage is for 119,000. We can pay off our second mortgage with the help of cashing out our Roth IRA that is now valued at $8,000. We would not have any penalties for cashing out the Roth IRA since we have had it for more than 5 years and there are no earnings on it at all. In fact, over the 10 years we had it, we have contributed 26,000 to it and now it is only worth 8,000. My question is:

Should we cash out our Roth IRA to help pay off our second mortgage so that we can refinance our first mortgage to a 15 year fixed rate mortgage with the rate being 4.6%. Our mortgage payment would be the EXACT same payment as we have now. We plan to stay in our house 5 more years. We would gain 40,000 equity in 5 years compared to the 7,000 we would gain in our current mortgage. We would have to cash out our Roth to do this. Should we do this?