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Profile picture for jersatx

Can I tear down and rebuild?

So my wife and I purchased a home on a beautiful piece of property in North Central Texas.  We love the location, love the schools, love the property, but the house......not so much.  The house is dated, metal roof with no decking, very energy inefficient, outdated windows, floors, floor plan, kitchen cabinets need replaced, etc., etc.  We are wondering if anyones knows if it's possible to go through our lender and justify tearing the old house down and rebuilding a new one?  Would we then have 2 mortgages to pay?  Is this even realistic?  Thanks.
  • August 06 2013 - Glen Rose
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Answers (3)

Profile picture for iupswack
This is likely not kosher with your lender.  Read your note/mortgage and Deed of Trust very carefully.
  • August 06 2013
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You will be able to do it if there is equity currently in the property as it stands. You will need a construction loan to payoff the current mortgage, tear down and finance the construction costs and then once it is complete you will refinance into another permanent mortgage. The current lender will not allow you to tear down the property that their loan is secured by so you will need a new construction loan that takes the tear down into account. A local bank would be your best bet for this type of financing. Good luck!
  • August 06 2013
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Profile picture for rtlvr
We did just that 30 years ago.  We had to pay off the mortgage on the  house we were tearing down first before we could go ahead with a construction loan on the new house. We also had to go before our planning board to have the plans approved, and have the surrounding neighbors also approve. 
  • August 08 2013
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