2nd Fixed Mortgage to Pay Down HELOC

[Federico Morales]

Hello guys,

I have a first rental which was my home until i moved for work and rented it out. I took out a HELOC on it to rehab it for rental.

Here is where I stand with the current property financing:

(1) first mortgage: 320k fixed 3.75% 

(2) HELOC: 180k variable prime + .25% (last bill was 5% total)

The thing is, the property's valuation has probably shot up due to appreciation and also as a result of the rehab we did. However, my HELOC is maxed out. I would like to tap in to this equity so that i can take the money out of state and acquire some better cash-flowing properties. However, I don't want to do a full cash out refi and ruin my nice 3.75% on the first mortgage. Also, I don't want to take a big pile of cash on which i am going to be paying interest until i figure out another investment vehicle and that vehicle starts producing income.

So what i would like to do is:

(1) take out a 180K fixed second mortgage on the property

(2) use the funds to pay down the 180k in the HELOC

(3) keep the 180K HELOC (or as much of it as i can given LtV and income constraints) so that i can take out money when i am ready to invest elsewhere for cash down payments/rehabs, etc.

Is it possible to do this? is there such a thing as a fixed second mortgage?

I know i can just ask US Bank if they will let me do it, but i wanted BP's advice :)