Thought I would follow up on this since no one ever really does.. hopefully someone will appreciate it
House did not drop in value - appraised at $265k. Our credit was also higher than expected, both 740+. We chose a 30-year conventional and locked our rate in at 3.375%.
Due to high LTV had to finance a bit extra, bringing the total finance to $249k, which makes our total payment (principal, interest, taxes, insurance) $1653/mo. Just closed yesterday.
We paid nothing but the appraisal fee up front, and will save a huge chunk of change ($50k in interest alone, not counting us paying ahead of schedule). MI also drops at 78% LTV, which knocks an extra ~160 or so off the monthly payment.
Thanks everyone for the input, and hope the update helps someone!