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How can I finance a tear-down and rebuild of my home?

Question by Me Me: How can I finance a tear-down and rebuild of my home?
and how is it different from a mortgage in terms of rates, qualification, repayment?

The assessed value of my house and land is over 3x the amount remaining on my mortgage.

Best answer:

Answer by Mke guy
you could do a cashout refinance of the home and use the money to build a new one. Once you have the money the lender has no idea what you intend to do with it.

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2 Comments for this entry
SDD
November 8, 2011
02:22

You could refinance your home at its current value and then tear it down. HOWEVER, most residential mortgages require a homeowner to maintain and keep their property in good condition and repair. Those mortgages generally state that the homeowner must not damage or destroy the property. Under the terms of the mortgage the lender would have the right to call the loan. Whether he would or not, I can’t say, but it is a risk you might not want to take. Why not talk to a mortgage broker in your area. This sort of thing happens frequently, and there are lenders who specialize in this type of financing.

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m2
November 8, 2011
02:38

refinance and “let the lender know”
you may not get as much cash so eg..25% or 35%of the assessed value……
and some lenders also will add a “line of credit” with the new loan..so with your..estimate of the rebuild..you will get a little extra cash if you go over..

do not “lie” to the lender those are very bad ..ideas.
if the “insurance comapny” insuring your home finds out they will inform the lending institution and you end up in court..

also if you do this “rebuild” successfully you then can go to the bank a 2nd time for “rebuild” money and you will not get a “hestiation” since you have a previous successful record of this type of project.

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