Hi Kam, mortgage guidelines rules had change a lot in the last year.
I will say that if you have the idea of refinancing in 6 to 7 months to cash out, then you could be better to get a mortgage now. There is no way to know that you will be approved in 6 to 7 months neither that your property will increase or decrese its value and this will have an impact on getting a mortgage.
Please, again, consultat with a ortgage consultant about future refinancing since you might not be able to do it, until 6 months.
I think an easy way to do it will be get a mortgage 30% downpayment and 15 years. If you decied to pay it off later, you just pay it, if not, no problem, but the money is in your hands and not "in" the house.
I hope you can get quilifed for a 15 years or maybe 10 years. That way, in 10 years you could rent it or sell it and buy another. Of course, it will cost you to use other people money.
The 1098 will be a small amount. Look for an amortization schedule on line, you need mortgage, interest rate and term (years).
Here in Minnesota most of the both units of the duplex are owned by the same person.
I am not a Realtor in your area so I do not know about home prices.