Paying off primary rental mortgage with HELOC

[Micah Starbuck]

I'm looking to access equity in one of my rental properties to make another rental purchase.

As things stand now, I owe less than 50% of what it's worth with a 28 years left in a fixed rate 30-year loan.

Here's where I need feedback:

I can get a HELOC as a 2nd for Libor +5% or as a 1st for Libor +3.5%.

I was thinking to use the initial HELOC to pay off the primary mortgage then go back to the bank and ask to extend the HELOC to 80% LTV and reduce the interest rate to the lower rate since it would then be the 1st lien.

Any feedback (positive, negative or otherwise) would be appreciated.  Thanks!