Originally posted by @Jordan Rahman :
I would not do a 15 year mortgage. It is much better to just pay a 30yr down faster and maintain the flexibility of a lower payment. For your first question, would you have to refinance? Or can you just get the PMI removed once you hit the threshold? Refinancing will be less than ideal because it costs several thousand dollars and rates will likely be higher then. For your second question the pro is that you can eliminate your PMI, will have equity built up, and will have force saved money in a manner that you cannot easily blow on whimsical purchases. The cons are that you will have force saved money in a manner that you cannot easily access to increase your net worth and income. And that money will likely underperform other uses you could find for it.
@Edward B. The main reason we will be looking to refinance is to utilize an FHA loan again on our next property, and I know you can't have more than one FHA loan at a time. If we are able, I'd love to use a 5% conventional loan on next property (Owner-occ), since conventional MI can be less expensive than FHA PMI. In that case, I'd send letter to remove FHA PMI on original property, and do 5% conventional on next property.
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