Refi - Good deal or search around?

[Matt Merriott]

I currently have a rental which I purchased and rehabbed in full with a HELOC from my home. Initial investment was 81k, currently owe 74k at 7.5% for 4 more years.

I contacted the bank to refi and here are my options:

1. LOC and a fully Amortized loan 7.7% (can refi after 1 year)
2. LOC only for full value (approx 100k) 7.7%

They will also finance 85% of future investments or appraised value whichever is lower.  

I feel option 1 is the way to go, I will still have around 25k LOC and have a normal payment over 25 years.

Or is 7.7% too high and I need to shop around?