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If u buy a old house and have a mortage,you tear it down and rebuild it do you have to get another loan. Or do you still owe the same amount on the previous house.

I just seen on T.V this man brought a house upon remodeling he just tore the old one down and built a new one. Has anybody ever did this and how does it work.

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mamaofficer

Asked by mamaofficer at 1:35 AM on Jul. 15, 2010 in Home & Garden

Level 31 (50,120 Credits)
Answers (10)
  • You borrowed money from the bank - the bank isn't going to forgive your debt just because you tear your house down. Yes, you absolutely still owe the mortgage. People do this because they either have the cash to buy the property outright (no loan, no mortgage), have the cash to build the new house, or they take out a construction loan to build the new house.
    getrealmama

    Answer by getrealmama at 1:40 AM on Jul. 15, 2010

  • I would think as long as you dont borrow anymore money then you would only owe on the original loan, however if you build a home that the value is higher on when it is appraised then your insurance and taxes would probably go up. I dont know I never checked into it, I have always wondered though. I always figured it was similar to adding on to a home.
    3_ring_circus_

    Answer by 3_ring_circus_ at 1:40 AM on Jul. 15, 2010

  • You still owe the mortgage, and whatever loans you had to get to rebuild. But if the value of the home goes up, I believe taxes do too...but that may vary from state to state.
    katzmeow726

    Answer by katzmeow726 at 1:48 AM on Jul. 15, 2010

  • Of course you still owe the money. The way that works is you borrow enough money to buy the old house, plus enough to pay to tear it down, plus enough to pay to build a brand new one. Essentially a mortgage the size of 2 1/2 mortgages.
    NotPanicking

    Answer by NotPanicking at 1:50 AM on Jul. 15, 2010

  • you owe the original mortgage. i think she knows she has to pay she just doesnt know if she has to pay the original or if building a new house would change the loan price.
    MomNbabyGirl009

    Answer by MomNbabyGirl009 at 2:21 AM on Jul. 15, 2010

  • You are responsible for your mortgage even if you tear the house down to remodel it. Some people will take out a home equity loan in order to have the funds to remodel.
    sherribeare

    Answer by sherribeare at 4:06 AM on Jul. 15, 2010

  • you still owe that mortgage... the bank is going to want their money!!! lolz
    jazmya_mom

    Answer by jazmya_mom at 4:18 AM on Jul. 15, 2010

  • Duh, just because the house doesn't exist any longer doesn't mean the mortgage doesn't. A mortgage will ALWAYS exist until it is paid off!!!
    twinsplus2more

    Answer by twinsplus2more at 5:20 PM on Jul. 15, 2010

  • Don't be funny I was saying basically will it be the same price.
    mamaofficer

    Comment by mamaofficer (original poster) at 6:47 PM on Jul. 15, 2010

  • It won't be the same price because you then have to pay for the house that is built....usually another mortgage. And like I said....the original mortgage will exist even if the house is torn down. Tearing down a house doesn't null the mortgage.
    twinsplus2more

    Answer by twinsplus2more at 11:19 PM on Jul. 15, 2010

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