Refinance fees vs Heloc

[Wendy S.]

Good day everyone.

So am trying to decide whether to get a Heloc or a refinance. Credit score is lowest 763. Averaging 779 amongst the 3 reporting agencies.

Present mortgage rate of 4.75%

HELOC would be 5.25%

Refinance 3.375%

Looking at the costs to refinance am wondering if spending $5,304 to reduce mortgage by $129.60 is worth it. Yes I get over the 30 Yr would result in almost $50,000 savings but what if I only hope to hold the property for maybe another 36 months or 40 months to break even with the $5304 spent in fees/closing costs. (Couldn't figure out how to add the breakdown).

Present mortgage is 4.75%

Mortgage payment is $638

Refinance proposed 3.375%

Refinance would be $508 ($5304 costs)

Then I thought why not pull equity out. Credit union will give up to 90% owner occupied at 5.25% with less than $1000 in fees.

Option 1 with $33,000 in hand

HELOC interest only for up to 10 years = $143

(Yes aware that HELOC is variable)

Mortgage @ 4.75%. $569

($638 now but can get PMI removed)

Total payment $712

Option 2

Refinance cash out with $33,000 cash in hand

would come out to about monthly pmt of $760.

I understand that the refinancing would give me a new mortgage at fixed interest rate payable over 30 years while the HELOC has a variable rate, no draw after 10 years but I would start paying on the principal and conditions could change also freezing or calling the HELOC.

My concern with the cash out refinance is, doesn't this negatively affect my DTI vs the HELOC which only comes into play if I use it?

Bearing in mind the goal would be to acquire an investment property in a few months followed by another primary residence house hack.

Sorry for my lengthy post, as trying to give the full picture, hope it's clear. Looking to make a decision today if possible so would appreciate all the feedback.