LTV not met, refi still an option?

[Alexander Lang]

Hey BP fam!

So I currently have a property that I have rented for almost two years now. Long story short, the lenders I have been speaking to only offer 70-75% LTV as to which my rental is not currently at.

The idea was to do a cash out refi in order to get some cash for my magic 20% down that lenders are looking for in skin in my area. 

Question is, if I cannot get adequate cash out from a cash out refinance, does it make sense to close on a conventional loan (cash to close $2328) which would drop my monthly payments by $123 a month (including my $56.26 PMI payment) from my FHA loan?

I would be adding $4,000 to my current loan amount from $122k to $126k. 

To me, the novice investor, the extra $1476 a year savings is very appealing to me, but I also do not want to affect any opportunities down the road (either to cash out refi or some other means to finance future deals for unit #2) 

Aprox house value: $170,000

Current loan:

Financing - FHA @ 4.50 for 30 yrs

Principal - $192.51

Interest - $456.11

Escrow - (tax/Ins/PMI) - $327.20

Payment due - $975.82

Purposed refi:

Financing - Conventional @ 4% for 30 years

Est. Principal & interest - $601.54

Est. Escrow - $250

Cash to close - $2328

Any insight would be greatly appreciated!

Thanks all!