Hyperborea
Thinks s/he gets paid by the post
Personally, I'd max the 401k to reduce your effective tax rate and then I'd aggressively pay off your mortgage. There are very few people who regret paying off their mortgage, including me.
I think it's probably also true that there are very few people who regret consciously making the choice to not payoff the mortgage and invest instead, including me.
I think the OP needs to restructure his mortgage to get rid of the mortgage insurance and bring the rate down. That may mean refinancing if he has enough equity or bringing some cash and refinancing. Or at the very least putting down a lump sum to get rid of the insurance. He should do this whether or not he plans to invest or payoff the house.