My house is in the Pacific Northwest. The houses in our neighborhood are mostly older (built between 1900-1940) and are built on smallish city lots. Many have been updated usually in keeping with the age of the house. Only 2 of 8 houses on our side of the street have garages large enough for parking. Most people park on the street.

We had an architect draw up plans that include increasing the size of our tiny 1910 kitchen, add a bathroom (we only have one), create a mud/laundry room and some storage. It also includes a two car garage with a workspace. Of course, with banks not wanting to lend money it seems we will be able to borrow enough to either increase the size of the kitchen, etc., or build a garage and do an inexpensive remodel of the kitchen within the existing footprint. Our house is on a triple lot, so we can easily accommodate a large garage.

Which do you think would be the wiser choice?