Refi or HELOC

[Carlos Villalta]

So My current monthly payment is $870 @ 3.75%. I owe $70k on my mortgage and a balloon payment of $30k. If I refi or do a HELOC I'm told the $30k would have to be paid off first so should I do a HELOC or cash out refi? I want to put an Adu in my back yard. Was looking to pull out $150k. If I do a HELOC the rate is 9% and if I refinance the rate would be 6.75%. I currently have a positive cash flow every month of $500 after expenses are paid. Thanks guys