Thanks a lot for all the inputs and guidence . Finally I Locked my rate at 3.75% for 30 year loan and no cost mortage (closing cost is almost 2 k estimated and mortgage broker is covering that ,i understand he is getting 2.5k and he will cover with that and pocket the remaining ) but still a great deal to me as my current rate is 4.5% and its a 0.75% reduction without anymoney out of my pocket .(This itself reduce 200 per month on interest which is a huge savings as i just started the loan 8 months back)
Now thanks to all your advice ,I am seriously thinking below two scenarios
1. prepaying monthly 500 (I am currently paying 300 and the easy option is to reroute the interest reduction gain(200) to principle ) will bring down the terms to almost 18 years instead of 30 years .
2. Put the 500 in RothIRA or other Index funds investmetns to grow
I am staying this home for atleast next 10 years (till my kid complete High School ,one of the best school district and the key reason to move here )