Refinancing - Lose PMI

[Michael Brown]

Hello BP,

I have a scenario that I need help with. These numbers are pretty spot on and a situation I am about to jump in on, however I don't understand the logistics of the refinancing piece.

Say I offer to buy a SFH for $584,000 in Boston, MA (Suffolk County) with an FHA 203K Streamline Renovation Loan (3.5% down); I put in the max of $35,000 in renovations, for a total of $619,000 into the property less the down payment (3.5% = $21,665) puts me at a base loan amount of $597,236 (just under the $598,000 max FHA loan for a SFH in Suffolk County). Add in the UFMIP ($10,452) for a total loan amount of $607,688.

At an annual rate of 4.25%; My Mortgage ($2,989) + PMI ($423) + Taxes ($409) + Insurance ($150) would total: $3,972. 

Can someone explain or spell out a refinancing situation. For example: If the place gets appraised for $675,000 a year from now (once I have lived there for at least a year) what that would look like?? 

Additional Info:

The home currently rents for $3,000 a month. I believe that with the renovations and the area that it is in (just outside South Boston with 2 parking spots) that it could easily rent for the max in the area currently per rentometer which is $3,500. It is a 3 bedroom 2 1/2 bath SFH. Let me know if I can provide any other details that would allow you to help with the refinancing question.

Thank you in advance for your help.

- First House Hack Attemptee