Home Equity Loan HELOC

[Nathan Frost]

Is it smart to refinance a home equity loan to a HELOC? My HELOC lender said this..

I am reaching out regarding the title report of your home. Currently, your mortgage is recorded as a home equity. In order to proceed with this line of credit we would have to pay off and close down your current mortgage. This will happen in the state of Texas if you took any cash out at closing or rolled in any closing cost. Please advise if you would like to proceed with paying off and closing your current mortgage.

You would have to qualify for a loan amount sufficient to cover the payoff for the first mortgage. You would have a heloc with a higher loan amount with still an interest only payment for the 1st 10 yrs. Your rate would be based on prime which is currently 8% plus a margin of 2.00%

Would this be smart to do?  Seems dumb when my primary currently has a 3.1 interest rate.  However, I am trying to add 1-2 rentals to portfolio.