FHA Loans: How Can They Benefit You?

For families with mid-tier income or who need a bit of financial flexibility, getting the best mortgage rate possible is a vital consideration. At City Creek Mortgage, it’s our goal to get the best available option for you and your family.

One of the best options we have available here is an FHA loan. “FHA” stands for Federal Housing Administration, and these are loans that this organization covers with federally-backed guarantees. Mortgage insurance is covered by the government, rather than by an individual borrower. There are several other great benefits of FHA loans – let’s look at a few.

Qualification Thresholds

There are several requirement areas where FHA loans are far less stringent than other popular loan formats. The first of these is credit score – you only need a 580 credit score to qualify for certain FHA loans through City Creek Mortgage, which opens up the number of people who are eligible for these.

In addition, you’ll also pay a much smaller down payment – as low as 3.5 percent in some cases, compared with the usual 20 percent for conventional loans. There are no prepayment penalties, and we may even be able to offer down payment assistance if you’re in need of it.


Everyone wants a good mortgage rate, and you’ll get one with an FHA loan. A credit score of 660 will qualify you for an FHA interest rate equivalent to what a score of 740 would have gotten you in a conventional loan format, a huge gap.

Closing Costs

Closing costs are often a large and burdensome expense, but this can be reduced with FHA loans. FHA loans allow the seller to pay up to 6 percent of the buyer’s closing costs, double the 3 percent that’s typically allowed.


Because of their flexibility, FHA loans are a great option for refinancing. You can refinance up to 97.75 percent of your home’s total value through City Creek Mortgage.


An “assumable” loan means that buyers are allowed to take over an existing loan instead of taking out a new one, and this is an option with FHA loans. This is another avenue of flexibility, which allows the buyer to choose the best option – either assuming the old loan at its rate, or getting a new loan with a better market rate available. Since there are no penalties here, the choice is usually simple.

To learn more about FHA loans, or any of our mortgage services, speak to the brokers at City Creek Mortgage today.

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