Willow, I understand completely how it is supposed to work...I guess I'm one of those math/excel gurus you keep talking about. But I am afraid for you. I guess my question is, if someone offered you a credit card with a $290,000 credit limit (or whatever 90% of your home loan is), would you buy that house with the credit card, send every dime of your paycheck to this credit card every time you are paid and then use that same credit card to pay normal expenses? It seems dangerous to me, and the banks are betting that "life" will happen to a lot of people and they will keep their balance at a very high level, always vowing to return to their budget "next month." Meanwhile, you are borrowing money at a higher rate with the HELOC and paying $173 a year for the privilege of doing that.
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