"Steel Is All You Need" and "Silver Sword For Specters" combined and updated for Next-Gen Edition
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Here are descriptions for the aforementioned mods:
Steel is all you need:
Silver Sword for Specters:
Install with TW3MM, if you use other mods create a merged patch with Script Merger, and finally run Menu Filelist Updater to get the Silver Sword for Specters mod menu to function properly. This is a complete standalone mod and doesn't require any of the previous mod's files or requirements.
Disclaimer: I take no credit for creating either of these wonderful mods, I just updated them. Full credit goes to their respective creators. If/when those mods are officially updated I will take this unofficial version down.
Updates: 1.1: Updated default values in mod menu 1.2: Revamped "Swords don't hit enemies if broken" option. Now, while this is enabled, swords will scale their damage based on their durability, to a minimum of 10% damage output at 0% durability. Additionally, swords will now bounce off enemies while broken. 1.3: Weapons and armor now degrade 50% slower while you have the grindstone/workbench buff 1.4: Adjusted weapon durability damage penalty. Damage now starts reducing at 70% durability to a minimum of 30% 1.42: Fixed damage scaling issues caused by 4.04 (Thanks liulicheng for debugging this for me) 1.43: Silver weapons can now damage normal enemies, such as wolves and humans