Jayo96, Home Owner in 36610

i want to do a knock down-rebuild of my home which is 2000sf. I have about 20k in equity I live in HSV near highlands elementary. what do you think?

Asked by Jayo96, 36610 Sun Sep 23, 2012

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3
Jim Simms’ answer
HAHAHAHA, use a chain saw!!!! Cut it in half and it will fall in on itself.

Hey Carl, he didn’t say he had a mortgage, just that he had 20K equity, that could be the value of the land.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Tue Sep 25, 2012
That is true Jim, though it's unlikely.
Flag Tue Sep 25, 2012
NO, NO, NO! You cannot tear down your house if you only have 20% equity in it. Your house is the security (collateral) for your mortgage! You cannot destroy it. To do so is illegal!

You would need to pay off the existing mortgage first, or get a construction loan that would pay it off on the 1st draw (at closing). The construction loan would have to be large enough to payoff the existing mortgage balance PLUS the cost of construction for the rebuild.

That means the new (rebuilt) house would have to appraise high enough to cover a rather large loan amount. A construction loan/permanent loan mortgage lender can order a "Subject to Completion" appraisal to see if this will all work.

We used to do these scenarios in the "Boom" housing market. Highly unlikely in this market.

Carl Heldmann
Source:
http://www.byoh.com/teardowns.htm
0 votes Thank Flag Link Tue Sep 25, 2012
Your question is far too specific to your indivual situation to get an accruate answer just from your question.

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Regards,
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Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
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rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
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0 votes Thank Flag Link Sun Sep 23, 2012
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