I own a 5 bed / 2 bath SFH that I'm currently house hacking but plan to move out of and keep as a rental.

• Bought: $284k (2 years ago)

• Conservative value: $380k (target ~$425k)

• Current rate: 7.35%

• Current payment (PITI): $2,273/mo

It’s fully renovated (tiled baths, large master addition, refinished hardwoods, granite, stainless, etc.).

Rental comps are tricky — not many 5BRs in the area.

• 4BR homes rent for ~$2,800/mo

• I estimate $3,000 low end, $3,200–3,400 high end

I want to hold long-term due to location and appreciation potential.

HELOC Situation

I used a $60k HELOC on another property and pulled ~$35k for down payment + some reno.

• HELOC payment: $310/mo

Original goal was to cash-out refi this property to wipe out the HELOC and essentially recycle my capital.

Lender Options

Option 1: Rate & Term Refi

• 5.99%, no points

• 70% LTV on $380k

• New PITI ≈ $1,983/mo

• No cash out

Option 2: Cash-Out Refi

• 6.625%, no points

• 80% LTV

• PITI ≈ $2,331/mo

• ~$30k cash out (enough to nearly wipe HELOC)

If I cash out and pay off the HELOC, I eliminate the $310/mo payment — effectively putting me at ~$2,021 total outflow. This frees up my HELOC balance back to the full $60k to use for my next purchase.

If I rate & term refi, I have a $1983/mo PITI + the $310/mo HELOC. If I go this route then I would focus on paying off the HELOC aggressively with my cash flow.

Another thought: cash-out now, then refi again in ~6 months into a lower rate (if available), but that means paying closing costs twice.

Question:

If your goal was long-term hold + strong cash flow, would you:

1. Take the 5.99% rate & term and just keep the HELOC?

2. Cash out, kill the HELOC, then potentially refi again later?

3. Something else I’m missing?

Appreciate any input.