Nancy - If your timeframe is that short then a re-fi now just doesn't make good financial sense. Unless you are carrying a very high rate now, the closing costs on a re-fi will never be made up by the lower monthly rate you'd pay for a re-fi'd mortgage over the next seven months. Of course unless the market improves there's a chance your house won't sell as soon as you list it (depends on location, condition and how competitively priced it is), so if you are just wanting to be prepared for a longer haul, then a re-fi might make sense.

Nancy
You need to talk with someone in the context of your total financial situation. It sounds to me like talking with a cpa or financial planner might be in order also.

In general the amount of time (the term of the long) is not material as long as you do not have a prepayment penalty. I would get as many specifics and options on the table, then talk with professionals.

Nancy,
You need to speak with some very good finance people. I am going to suggest a few however there are quite a few great ones and there is money to be had
Tammy Blea with New Mexico Bank and Trust at 505-946-2520
Marty Enfield with Century Bank at 505-989-1939
Francis Phillips with 1st Metropolitan Mortgage at 505-982-8310

Hope this helps,
Victoria Murphy
Santa Fe Properties
505-988-3700