No. of Recommendations: 1
Sounds pretty complicated to me. The problem with a complicated machine with lots of moving parts is that if any one thing goes wrong, the whole thing comes crashing down around your ears.

You are worried about paying interest while money just sits there, and piddly things like non-deductibility of points, etc. Whan you should be focussing on is "what if something goes wrong?" You should be focussing on risk first & foremost, not taxes and not low earnings on cash.

the plan to build the new house first, move into it, and then sell this house

If things go pear-shaped, you'll be in the position of a number of people I have seen in our area. Old house gets a realtor For Sale sign in the yard, then a few months later a sign from a different realtor,......then a different one.....then BOTH houses get a For Sale sign, and they move into whichever house doesn't sell.
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