Use refi to cash out or wait for HELOC?

[Abi O.]

I'm in the process of refinancing my 3 family property located in New Jersey. Current interest rate is 4.25%, I will be moving down to a 2.625% rate. Current mortgage balance is $280K and home value is $580k+(~ 49% LTV). Its my primary residence as I live in one of the units.

The house needs about $100k for renovation work. Since I will be paying closing costs for the refinance anyway I am considering taking the $100K at the time of the refinance closing and holding onto it until I need it.

Things to consider:

-  The timing for when I will spend 100K is not yet determined. 

 - If I do a cash out for, I am hesitant to invest the $100K in anything long term as there is a chance that I will need the money as early as next year.

- If I don't end up needing the money for a couple of years I am annoyed by the fact that I will be paying interest on money I'm not using. This is the main reason I'm considering a HELOC.

I am aware that a HELOC can be more expensive from an interest perspective and will have it's own set of closing costs outside of the refi I am doing already. However, I am trying to determine the best way to financiallly analyze how to value which option makes more sense.

Any suggestions from you gurus?