This old house is too small, and is just about falling apart. We’d like to get a bigger house with a basement, but buying into a bigger house would mean getting a new loan. Plus, we like the property location. When we had the house appraised 12 months ago, it was estimated to be worth $550,000 — most of that value is in the land, as real-estate is super-expensive around here.

I’d like to hang on to the existing 5.0% fixed mortgage, stay on the property, and just have a new house put in to replace the little “shack”. Is this possible? What are the possible complications? How do I go about this process?

EDGAR