FHA versus conventional upfront mortgage- old home inspection report. Need Help.

[Rahnesha White]

So I'm trying to determine if I want lock in a FHA loan or conventional loan I qualify for both. I don't like that the FHA loan is essentially $5,800 more for the cost of the loan due to the upfront mortgage insurance even though its financed into the total loan amount. However, I just got the home inspection report back and there are a lot of things are that flagged. I'm thinking that I might have more negotiation power locking in a FHA loan because I know the lender has certain required repairs that the seller would mostly likely have to fix prior to closing.

If I go conventional I would save the $5800 upfront mortgage insurance but I don't think I would have much negotiation power with the seller to fix things per my agent observation. So the question to me becomes do I think the lender would require the seller to fix at least $5800 in repairs to justify doing the FHA loan since I qualify for conventional also- FHA seems more protective since its an older house and this is my first home not exactly sure what to look for.

I'm not sure because I don't have much construction knowledge to determine from the report how much the repairs might potentially cost but I do I see a lot of things flagged on the report some things I noticed were ...Roofing has ponding/roof
shingles that are damaged, Termite Damaged was visible In the Framing Members, Due to the installation of finish surfaces, the slab is mostly inaccessible and could not be throughly inspected, Soffit damaged/rotted wooden siding trim had termite damage, Stucco siding had damage
sections. Garage has open live wiring exposed suggested to install, small Shop in back yard roof sheathing has Water damage, missing smoke detectors/carbon monoxide detectors in the rooms, no A GFCI Outlets in Bathroom.. I'm not knowledgeable enough in the construction part to know how bad or how much is much cost to make repairs. Would love to know your thoughts can also DM me. Thanks 

[Brayden Hrycko]

Hello @Rahnesha White,

Another thing to consider is that just because there are some things that are flagged that need to be fixed prior to closing, that doesn’t mean the seller will pay for those. In this market, it is very common for the seller to jump ship if they need to put more $ out. It is still a negotiation between you and the seller. 

Also, take a look at the PMI and the rate/payment for fha vs conventional when running numbers. You'll see what you're saving and if that $5,800 makes sense over time as you're saving more monthly then that $5800 strapped to the loan would add to the payment itself.