Combine First & Equity line into Jumbo - Is it possible?

[Russ Layton]

I have a question for all the mtg broker folks out there.

I have a primary mtg of $400K (fixed, 25 year @ 3.875%)
I have a home equity line of $200K (variable at 3.25%)

House will appraise for $900 or more (have refi'd 3 times in last 3 years and appraised at full value every time)
I have absolutely stellar credit ~750
I am employed and have a high income

My mortgage broker is advising me to refinance my primary mtg to 3.5%. No pts, no closing costs.

I am thinking i'll do that but I just asked him what I could get, rate wise, to combine both loans and fix the rate (I'm afraid of that variable home equity I have out). He said that this would be a jumbo cash-out loan and would kill the rate. He also said I could fix the rate on the second but the rate would be 7%.

Are there no options for me to fix both of these loans at 4% or better?

Thanks,
Russ