With such a low mortgage balance, your total closing fees will be a significant part of your comparisons.
Also, as a side note, if you're dealing with 60% down, I wouldn't even bother having a 'pre-qualification' rate. In many places, it's still a buyer's market, and if you're working with 60% down, I can't see financing being an issue...so just submit your offer without any financing contingencies.
I'm in the process of refinancing my 5/5 ARM with PenFed Credit Union
http://www.penfed.org/ to roll it into PenFed's 1.99% 5-year HELOC. There are ZERO closing fees/appraisal fees, and it's a rock-bottom rate to boot! (If you pay off the loan within 2 years, then there are fees they will charge you). Also, if you have more than 30% equity, they may bypass the appraisal fee as well. They may let you do it as an initial purchase....if they don't, you can do their 5.5 ARM with a purchase, and it will likely also have a zero/minimal closing costs and fees structure.
Given your dollar amount and projected payoff schedule, I'd strongly recommend the PenFed 5 year HELOC at 1.99%. Any 30-year product will likely carry a few thousand in total appraisal/closing fees - and a few thousand in fees alone is more than the interest you'd pay on the PenFed HELOC! :)
Anyone can join PenFed Credit Union - if you aren't a member of the military, just pay a one-time $20 fee to join the National Family Military Association, and you're in like Flynn!
Oh, and their credit card also gives you 5% cash back for any gas purchase, and 3% cash back for any supermarket purchase.