Time to refinance again (3rd time since December 2019) - cash out, or get equity loan?

[AugustB]

Hi everyone,

It's has been just a few months since my last refinance, but due to huge gains in property value (10% in the past 3 months) it might be time to refi again. I am looking for opinions on my next steps. 

Estimated current value: $525k
Current mortgage: $395k

Credit score: 741

Current loan: February 2021 (FHA streamline)
Previous loan: November 2019 (FHA)

Current rate: 2.25%

PMI: $260/month

My Feb refi was started in November 2020 but due to heavy refi load and some document requests it took until January 2021 to close. It was a streamline refi so the cost were very low and I dropped the rate from 3.75% to 2.25% so it was worth it. Was not expecting the value to go up so quickly since, and it now seems I can get rid of the PMI and take a little cash out ($35k) for some home projects (not 100% needed, but desirable). 

Trying to figure out which of these steps is best. 

1. Refi to conventional with a 77% LTV (after closing cost and PMI refund), then take out $35k equity loan (total LTV would be 84%) - would have closing cost on 2 loans 
2. Refi to conventional with a 80% LTV ($15k cash out); with option to take more with an equity loan at a later date. - would have closing cost on 1 loan
3. Keep FHA with PMI, and get $35k equity loan (total LTV would be 80%) - would have closing cost on 1 loan
4. Investigate home equity line of credit - not clear on closing cost.

I have no issue paying a bit more for my mortage. Any thoughts to share here, or other options I should consider?

Thanks

[Shooting-For-800]

WHY?

Closing costs?

How much is your PMI?  260.

It would take you years to break even on closing costs to get rid of PMI.

See if you can get a reappraisal to get rid of PMI.

I would look for a no cost HELOC.

JMO.

[NC_Mtg_Loaner]

What's your current APR?

with 2.25% as your primary note rate I'd expect your APR is in the low to mid 3's which would be tough to beat and would therefore make the opportunity cost of refinancing again a bit of a waste except for the fact that you'll be able to remove the PMI which is the primary reason why I'd do so. 

Then, if you need money for repairs, take out a HELOC as they generally have lower closing costs.

[AugustB]

Rate is 2.25%

APR is 3.22%

Because LTV was 95% on the streamline I cannot cancel mortgage insurance without a refi.

With the advice here and thinking out loud with closing cost of 4%, about $13k, it would take 4+ years to break even on PMI assuming I can get an conventional APR in the mid-low 3s. Seems like this is a bad option.

Thanks all

[AugustB]

From deeper reading it seems I can do another FHA streamline with appraisal to get the LTV below 80%. The net tangible benefit would be a greater than 5% reduction in payment (P&I plus PMI) since my PMI is about 11% of my payment. I would have to wait until August 2021 to allow 6 months to pass from my last refi. The closing cost (non refundable/non tax/non insurance/non PMI portions) in my last streamline was $3200, which gives a 12 month break even assuming I can get the same base rate. 

I could then do a HELOC or HEL once the new refi is done, and pull whatever I need.

I think this works.