Lenders become very frightened when the property on which they hold a mortgage undergoes a change. Your mortgage probably contains clauses giving your lender rights in these circumstances. It's best not to mess around. Send written notice to your mortgage lender (and to a mortgage service company, if such a company services your mortgage), then follow up to obtain their written permission for the demolition and reconstruction; without any penalty or acceleration of the mortgage.
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Tearing down the house is committing waste and is a violation of your mortgage. You should consult your mortgage holder about your plans and get their permission. If your mortgage is not in default, you mortgage lender will probably finance the construction of he new house.
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Read your mortgage. Tearing down the house is likely a default and will trigger acceleration.
Consider paying off the loan and getting a construction loan to build the new house. Or, as was already suggested, get the lender's permission (in writing) to tear down and rebuild.
If you cannot determine what your mortgage says, or if you have difficulty getting the lender to agree, I suggest you contact an attorney to explain your options.
Worse yet, if you damage the bank's collateral, they can probably seek to have your debt to the bank nondischargeable under the Bankruptcy Code if you file for bankruptcy in the future. See 11 U.S.C. Section 523. Do not do it without showing an attorney what you believe to be explicit written permission from the lender and asking the attorney whether it is sufficient.
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