How Do I Refi A Rental To Pull Cash Out? Banks Not Helping

[Justin Steele]

I purchased a single family home last fall 2019 using a HELOC from my primary home. The HELOC is the only lien I have on my primary. I have renovated the rental property and have had it rented since FEB 2020 Id like to tap into some of that equity of the rental home to buy another property but I keep getting told its not worth paying the closing costs by the bank to refi this rental.

HELOC is at 3.99% I'm applying almost all rent money into this to pay it off. Am I just not thinking the correct way with the refi or am I not using the right lender? I have went to Flagstar Bank & some other mortgage lenders in kzoo all seem to say its not worth a refi as the interest rate on a secondary is much higher than 3.99% I'm stuck with where to go. I don't like leaving the HELOC open on my primary either that seems risky. Id rather have a loan on that rental. Also I don't believe I can write interest off at tax time for a HELOC.

Thanks for any help