Should I include wife on mortgage please advise
No, not necessarily, just the cost of the loan. Do you need her to go on the loan to qualify or not. If your credit scores are higher than her's the pricing for the loan will be a little different. I don't think that it will matter a great deal. Whomever you utilize to do your loan have them price it out both ways...

we have a 7/1yr arm mortgage--7 yrs will be in 2015--what happens then?
Your rate will become an adjustable. If you have had this particular loan for 7 years I would strongly recommend that you look into refinancing. The rates are so much better!!!