HELOC, HEL, or 2nd Mortgage to finance Second Home

[Sam H.]

Hello!  

I am looking into purchasing a second (vacation) home and would love to hear your thought on the pros and cons of going a conventional 30-year second mortgage vs. using a HELOC or Home Equity Loan on my Primary Residence to purchase the second home outright. Here are the details:

Purchase Price: $300K

Down payment if taking mortgage: 10%

Available cash on hand: $40K

Equity in Primary Residence: $700K - $1M

Second Home will need $10K initial investment to freshen up for personal and STR use.

Assume equal rates for each product?  Or does one product typically offer better rates?

I am thinking the Pros of the HELOC/HEL are a faster closing, perhaps a cash discount for the purchase, no PMI, lower rate/cheaper closing?, and keeping my $40K cash to invest in the property. Pros of the second mortgage are reducing the risk on my primary residence. Seems like a no brainer to me...What am I missing?

Thanks!

Sam