Personally, I would recommend switching from bonds to high dividend yielding utilities. Utilities are known to be safe with low risk.
If you use "Value Line" (http://www.valueline.com/), you can find a whole bunch of utility stocks with a safety rating of "1". Take the top 10 dividend yielding of these companies and invest in them. This might have a slightly negative impact on the yield you are experiencing with bonds, but the upside is that you can gain value through the stock prices going up (and they do tend to go up). It's a better overall investment than bonds for this reason, while maintaining safety.
Secondly, like others have said here, you have to ask what you want. How much does the PMI cost? And what could you potentially be making on the 60k? Also, because it is someone else's decision whether the PMI is still necessary, you would need to get a commitment from them saying that it would be removed if the loan was paid down before considering that option seriously.
If you want, I could make you a portfolio based on value investing. I have another thread here where the one portfolio that I have made for this forum is currently up against VTI, which many here believe in far more than my ability to make a portfolio. You can check out my forum, prostockpicks.proboards.com, for more examples. I'll make you a portfolio for free if you want.