£14000, Garage/Mortgage - Deal or no Deal?

Djolltax

Hello MSE's....

Here is the quandry I am faced with...

A year into a new job since being made redundant, I invested 6000 into an ISA (wife and I) and then the rest into Icesave ISA and bank account. :eek:


Now that we have the cash back from FSA/Icesave :T I am stuck. My ISA I can deal with - but the Icesave cash and Icesave ISA money amounts to about £14k.

I can build a garage, to add value to the house, or I can take £14k off my £54k mortgage. (Interest only, 9 years left to run) The endowments are looking like having a shortfall (4%) of £14k......

I'm happy to use this money for either, as I will still have about £6k in the ISA for short term requirements... but I would like your sage advice as to which is the best option, or if there is a better way to go...????

Many thanks,

Djolltax

Robert_Sterling_3

I would reduce my mortgage.

sheslookinhot

Whether you reduce your mortgage or build a garage, I would switch mortgage to a repayment mortgage.

Djolltax

Thanks guys so far,

Actually we ARE looking to switch to reduce the capital as well, either repayment or else an offset mortgage, like the 1st Direct one, for the remaining term so that we can overpay, whatever we choose regarding the garage question :j

dimbo61

Do you really need a £14000 garage ?
I have a lovely big detached double garage next to my house which came with the house!
Will it add £14000 onto the value of the property ?
Adding to a property must be considered carefully

Djolltax

I have definitely considered it Dimbo61....

The price is a good one, for the size and the current reg's. It will recoup it's outlay if we sell, and will be used in the time we stay here... We went as far as going for planning permission for it recently, but are "wibbling" as to whether the money would be better off the capital instead...

WillowCat

If you really want a garage then go ahead and build it.

If not, pay the money off the mortgage.

Don't do it to add value - you'll likely be disappointed.

Djolltax

5 - 0 for the mortgage capital reduction so far...

dimbo61

Like I said if you want a garage and can afford it then get it built.
Its somewhere safe to put the cars,lawnmower and thousands of other items.
If you have a tiny cottage a modern double garage may reduce the value of the house but if you have a 4 bed detached that would really benefit from extra storage space and safe parking for 2 cars.
The decision is up to you and you may still be able to repay the mortgage over a short time frame to become mortgage free.

dimbo61

Overpay on the interest only mortgage say at least £2k a year to make up the shortfall and up to £6k a year to repay the IO mortgage within the 9 years and then have the endowment as a savings plan

Peelerfart

Djolltax wrote: »

5 - 0 for the mortgage capital reduction so far...

Quite right !, as you would expect here

Now Djolltax , try asking the same question on say Classic car weekly or Harley Davidsons R US and see what result you get there !