Hello,
Less than a year ago I purchased a new primary residence. At the time I was low on cash so I took a line of credit on a commercial building I own @ 5% interest only with a 2 yr balloon and paid cash for the house.
Now that I have enough money to put down as much as 50% of the purchase price of the primary residence I am shopping for a mortgage on it to pay off the commercial line of credit.
The lenders I have spoken with wish to charge me 3/4% higher than standard rates because my house is paid off because it's now a cash-out refi. Best deal I can get on a 15 is 3.75% vs 3.00%!
One banker I spoke with is offering a HELOC @ 1.5% under prime with no costs. The terms are a 30 yr amortization with a 10 yr conversion. Would the HELOC be deductible in this circumstance since I'm paying off the loan I used to buy the primary residence?
Any ideas about my best course of action at this time?
Thanks!
RIch