Same deal here. Was told initially no appraisal would be needed. As soon as we showed interest in a refi they changed tune---and that appraisal would included inspection of all rooms and especially the foundation, homes furnace and water heater.
The savings was not that dramatic, and the way I looked at it I'd rather be paying off my note in 20 some years than getting out of jail in 20 some years.
I'll just throw extra at the principle every month and pay that loan off early from outside the penitentiary.
Kinda sucks, but there is a price to pay for everything in life.