We are considering tearing down our home and building a new one. What will happen to our current mortgage during construction and after completion? What if we do not want to go with the current lender for the new mortgage?
You need to call your mortgage company. You may be prohibited from tearing down the home without paying them off. It is not as simple as replacing the old home with a new one.
What you may end up doing is finding a lender (a new one or your current lender) who will provide you with a construction loan for the new home. A new loan is made, the existing loan is paid off, the old home is razed and the new home is built, then you transition from a construction loan to one with payments.
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You need to call your mortgage company. You may be prohibited from tearing down the home without paying them off. It is not as simple as replacing the old home with a new one. 