Tax Question for Commercial Line of Credit

[Michael King]

I'm back again with another tax question for the CPAs here. I'm under contract for a 4 plex for $320K. I don't have the 20% downpayment, so the bank is financing me a $100K commercial line of credit against a rental that I own free and clear. In all I'll put $35K of my own money down for this deal. The interest rate on the CLOC is 4.75% and I''m aware I can claim the interest as a tax write off. This has been my original plan, but I just had this light bulb moment where I could use my cash to pay off my current vehicle loan ($20K, or a $500 per month liability), then use $65K of the CLOC, add my remaining $15K cash to make up the 20% DP...and thereby eliminate one monthly debt and receive a better tax advantage with respect to the now added interest for paying off the car.

Am I missing something? Is the lightbulb really just a freight train at the other end of the tunnel headed my way??

I appreciate your help.

Mike