Mortgage interest comparison and debt

[Ashlee Chou]

Comparing

1) 2.6% 30yr fixed interest rate 

2) 2.1% 7yr arm (the term will expire in 6yr) cashout refinanced and use the cash for other investments.

Which is better? Sort of feeling like #2) will significantly increase debt and other investments is unknown and some tax liability.

If 2) is already done, any ideas after 6yrs and the rate become float?