Refinancing Our Mortgage will never happen

The other day I was going through the mail and I saw a notice asking me to call about refinancing my mortgage. It was a streamline loan that would mean no property value assessment and very little if any fees.  To add more icing to the cake, they were offering a 3.75% interest rate.

I was reading up online about how you could get a 15 year FHA mortgage with NO mip payments if your loan to value was less than 89.99%. Now I hate those stupid extra interest payments each month and right now they won't go away until our loan to value ration is below 78% and we have paid them for 5 years. So the idea of getting them to go away now sounded amazing... only problem is our loan is at 89.99 loan to value. It's way higher. 

So I did some math. If SCB and I didn't put any money into my Roth IRA for the year, we would have enough money to pay down our loan to the correct loan to value ratio...  Essentially giving us a better rate, a shorter term, and no more MIP payments!  

So I called... 

and my dreams shattered. You aren't allowed to refinance a 30 year FHA loan into a 15. The only streamline refinance I can do is a lower rate at another 30 year FHA mortgage... but then that peaky little problem of ours resurfaces...

Our FHA 30 yr fixed rate mortgage comes from BEFORE the government changed the formula for MIP payments. Essentially new mortgage MIP payments are double what we pay.  

The guy on the phone did a lot of math and at then end, he told me he couldn't refinance me into a better rate because all the savings would be eaten by the increased MIP or the amount we would save would not justify the costs and restarting our 5 years of MIP payments (at a minimum).

So our best bet is to simply pay down our mortgage, wait till we have 20% equity by current property value standards, and if rates are still low at that point, then look into refinancing.

So much for that idea.