HELOC rejected due to high DTI. Any suggestions?

[Timothy Jung]

Hello, 

I am a newbie from LA california who is hoping to start a REI journey!

I bought a Condo on 2016 which is now worth about 600k( Zillow estimate) and I have a principle balance of 316k. I got 1/7 ARM at 2.87% rate back then.

Recently I applied for HELOC to buy another property and got rejected since they thought my DTI was so high. But when they were calculating it, they assumed my mortgage interest rate higher than my current rate since its ARM and they wanted to assume the worst case scenario. That ended up increasing my monthly mortgage payment higher than $2000 (currently I am paying $1400) which increased my DTI significantly.

What do you guys think is the best strategy at this situation? Should I refinance the property to a fixed rate and apply again even though I will no longer enjoy my low interest rate? Or should I shop around other banks to see if they can make it happen? 

Any opinions will help!