Refinancing or second mortgage is a better option (details in details)?

We bought our house in 2004 for $ 54K and have a 30-year mortgage rate fixed at 5.25%. Our balance on our mortgage is $ 47,500 Our house has appreciated and is now worth about $ 100K. We have student loans and $ 16K credit card debt of about $ 10K. No car loan. We expect a return of about $ 4500. We also wish to add on another room in our house and have an offer of $ 7,500. We want to refinance about $ 80 – $ 85K. With interest rates down to medium low 5% is a better deal to refinance or obtain a second mortgage? Thank you for voraus. Mein husband and I have excellent credit.

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