The existing mortgage is for that house on that land. It's (almost certainly) an "owner-occupied" mortgage. Thus, you'll have to talk to the bank. They'll want you to refinance the property (which pays off the original loan) with a new "commercial" mortgage (probably at a higher interest rate).


A mortgage is a secured loan, like a car loan. A secured loan has collateral - the thing of value that backs up the loan. When the collateral stops having value, the loan principal is immediately due in full. Normally, insurance takes care of that. In practice, if they catch you, things could turn ugly for you. They could immediately call the note. Now ...

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