Beware of one thing when dealing with a bank and doing a teardown - unless you make it very clear to the bank that you intend to tear the house down, they will end up being very concerned when it starts to come down. We recently had a situation where we bought a house and took out a mortgage for only about 50% of the bank-appraised value. We bought the house because it was a fixer-upper and we wanted to tear it down and rebuild. It was in very bad condition, and everyone else looking at it during the time we were making an offer on it felt the same way...there's no way someone could have lived in the house for long without fixing it up. We even told our mortgage contact at the bank that we were planning to tear it down and rebuild (with our own cash not a construction loan). He seemed supportive and commented many times on what a great lot it was and how nice it would be when the house was "done." So, it was clear to everyone involved that it was planned to be a teardown. Long story short(er!) - we bought the house in Sept, and in January, when we had our completed architectural drawings, structural drawings, had received building permits and were ready to start demolition, one of the final items on my list was to obtain "course of construction" insurance, which takes the place of homeowner's insurance when you are dealing with a construction/teardown project. In the process of signing the insurance documents, I noticed that the insurance company wanted to know if the bank should be listed as an additional payee in the case of a claim. I called the bank to ask if they're typically listed on a course of construction insurance, and after speaking with a few different representatives (none of who knew anything!), I was transferred to the office of the VP of Risk Management (or something like that)...anyway, someone on her staff almost had a fit when they heard that we were about to tear the house down. She kept saying that our house is the "bank's collateral" and not ours to do what we wanted with and that we could not proceed until we had the appropriate bank approvals, etc, etc. Keep in mind that we were not asking for the bank to pay for the construction, we are paying for the construction in cash, and we had an appraisal (done by the bank's OWN appraiser!) that was completed in September which showed the value of the entire property to be $1,100,000; they even broke this down between the lot value (approx $950,000) and the house value (approx $150,000). We have a mortgage for $500,000 so obviously, even in a worst case scenario, if the house was torn down and never rebuilt, the bank has FAR more collateral in the land than they ever had in the rickety old decrepit scary house!! Still, this person INSISTED that she had to go to some sort of approval committee and get approvals before we had a demo truck even enter the property. My husband and I were furious (although also somewhat bemused by this bizarre lack of logic and ridiculousness) and we spoke with several others at the bank who listened to our story and believed us when we told them that we had been very clear with the mortgage person during our loan approval process, telling him all the time that we were buying a "teardown"!! Our point was that, if there were further approvals necessary, he should have told us about them up front. Finally, we had a senior VP reluctantly agree with us but we are still being hounded by this VP of Risk Mgmt who is still insisting that we need to forward her a copy of our contract with our builder, our approved architectural/structural plans and all kinds of other info! At this point, we're ignoring her (because we have the approval of the senior VP), and construction has started, but this has been a big pain and total surprise. I'm telling you this long story because it just illustrates how crazy and upside-down the banks are these days and how their underwriting/loan approval processes have gone wildly from one end of the spectrum (super wide open) to the other (absurdly tight). My husband and I are the perfect clients for them - we have stellar FICO scores, have a longstanding history of repaying all our prior mortgages (two of which were with them), and MOST importantly, the bank has MORE than enough collateral in our current property to cover it all even if we never paid another dime!! So, I'm sorry to say it, but like others have basically said, I would be surprised if you get a construction loan with your current situation, and IF you decided to and could somehow do it on a line of credit or home equity situation, BEWARE that the bank will have a fit if/when they find out that you're tearing your house (otherwise known as the bank's collateral) down. Sorry, I don't mean to be a bummer about all this but it's best to go into it with eyes wide open and know the current lending/housing environment. Whatever you do, best of luck!!

A story? Well, one of the first things we did was an exercise out of the Not So Big House books: We made a list of the words we want to describe our house. In our case, we had a lot of words about function: Efficient, energy-efficient, good storage. And a lot of words about the "feel" of the house: Cozy, charming, nostalgic, friendly, inviting, light-filled. And words we don't like: Dramatic, modern, impressive, funky, trendy. That's not a story exactly, but it's kind of like setting a goal for how we want the house to work /feel /look. And we're very clear on what we want: A small (1600-1800 sf) house for the two of us after the children are gone, which will be built on our 45 acres of farmland. We want it to be age-friendly and to have all the everyday living spaces on the main level, and we want it all to be easy to clean and low-maintenance. We want every space on the main level to be used every day. We want to have a small upstairs for guests. We want a great outdoor kitchen with ample seating and a small pool. And we want it all to be mortgage-free. That doesn't feel like a story to me; it feels like a goal. Two comments on this thread with which I can really agree: While I believe in electricity, plumbing and even central air...I do love old houses. So while I would never be considered a 'purist' my perfect home would probably be similar to a car build on "Fast and Loud" LOL. I want it to look vintage, I want it to pay homage to vintage....but I want the car to go fast, stop on a dime and have air conditioning :) and I guess our not-yet-finished house's story would be 1920 meets 2014 technology I like the door picture ... but I'd say it's a cottage door leading to a small, picturesque home.

Hi Danny :) We lost our home to fire just this last November, I can relate to your current fears. Have you already chosen a builder? I ask because we chose one pretty quickly and he has helped us to navigate how insurance claims work and eased our fears tremendously. Our initial estimate didn't include replacing the joist system either, and, like you, I was ready to be really upset. But our builder calmed me and said this is just how it works. Apparently, this is standard operating procedure. It is far more expensive to mitigate than to just replace in most cases, but insurance companies want proof of that. He sent them the estimates and cleaning/sealing was way more expensive than tearing it out and replacing it. So here we are today, finishing demo and my builder tells me they are paying to replace the joist system. Apparently, it is twice as expensive to keep it. So I wouldn't go all "guns blazing" just yet. Your builder can make the case to replace instead of repair. Our insurance company sent our initial checks to replace the house (policy limit payout) around the same time we were hiring our builder. The builder has since submitted claims for code upgrades and claim changes... and the insurance company has sent those checks along in a timely manner. We also have replacement coverage and he will make the claim for those funds after the items are installed (though very little was "depreciated" in our claim even though the house was 50 years old). When I was interviewing builders and discussing some of the things I was concerned about regarding Insurance replacement, they all said pretty much the same thing, "Don't worry about that, that's our job". Knowing that he knows when/how/the right time to argue a point, makes my role in this so much easier. I can't recommend a Public Adjuster because we didn't use one. And in hindsight, I'm glad we didn't. We didn't end up needing one. But even if we needed one today, we could still hire, so no need to get in a hurry. They'll still be there if for some reason you did need them later. At the end of the day I just couldn't pull the trigger on paying someone $$$$ to "do battle" for me, when I wasn't even sure there was gonna be a fight. It turned out to be the right choice for us. Our claim has been paid at full policy limits for structure, we are able to put our home back and even make improvements with the settlement with no problem, and our builder has made code upgrade claims that have been paid without issue. Our contents claim is not finished yet, but I did the inventory after the fire myself. It took me 4 days, and it was very cold and WET, but I saved myself $14,500 by not hiring the PA. The initial itemized list the insurance company gave us after their inventory was reasonable... but there were some things I saw that were missing (things that one would have to dig under the debris to locate... and I knew we would get a better resolution if I put in the work to locate and document them. I have not seen the settlement yet, but my contents adjuster says to expect it to be at or very close to policy limits...and that we also have 3 years to buy everything back and submit receipts to recoup additional replacement costs. So NOT hiring a PA has saved me $55,000... and hiring my well qualified/experienced large loss builder - early in the process has saved me a ton of stress. I hope this helps in some small way. Hang in there.

This is "The old House Forum". It is highly unlikely you'd find anyone here who would take a beautiful old house and make it look modern. Update maybe, but a modern look? TSK, TSK, TSK,,, They'd sell their soul first. ;-)