We had a similar question so I went to our bank that holds our Heloc. Yes it can be converted to a mortgage even though small. Ask your banker - a new Heloc may be a better option for you even though the rate floats - nothing major is likely to happen for a while so see how competitive they can be.

Yes. You can do a mortgage.

Other questions for you to consider... Do you fill out a FAFSA for your college children's financial aid? How does a mortgage help (it will help, or be zero, will not be a negative) on the FAFSA?

Are you or your children taking out loans to pay for some of college? What are the loan rates? Higher than the mortgage rate? (probably) Would it be better to finance college with a mortgage than with student and/or parent loans? (maybe--look at interest rates)

Do you have money available to you at a lower rate than a mortgage? (probably not).

You can refinance your house to any value up to 80% of your home's bank-appraised value. You can choose to pay back most of that loan immediately, if you wanted. Or, you could wait to pay it all off after your children are through with college.

I think you have many options, since you are so relatively debt-free.

Thanks so much for your very helpful responses.

dlm2000, a new heloc is an interesting possibility.

kirkhall, those are good questions, some of which had not been considered before. (Yes on the FAFSA, no on the student loans. Yet.)

I very much appreciate your help!

As I recall, your bank account balances factors into your FAFSA application. I can't remember (not to mention it has been several years since I did a FAFSA) if your mortgage loan is recorded on the FAFSA for your primary residence. What you DO NOT want, as I recall for that FAFSA, is a pile of "cash" in your bank accounts because it treats it as expendible cash.

Definitely take a look at the FAFSA and maybe print out a few and run a few scenarios to see how you'll make out with each, to make sure you don't shoot yourself in the foot...