Mortgage my residence to fund investment purchase?

[Carl A.]

I currently own my personal residence outright, and am looking to purchase a $700k investment property and need a $300k loan.  There are two options:

1. Take a commercial loan @ ~5% on the investment property

2. Do a cash-out refi of my personal residence @~3% and use that money

It seems like #2 is better since I save a significant amount of interest.  But am I missing something that I should be considering?   Thanks!