Personal Mortgages

Mortgage Basics - What You Need to Know Before You Buy

Buying a home is one of the biggest — and most exciting — decisions you’ll ever make. But let’s be real: words like "amortization" and "term length" can make mortgages feel like a different language.

At Prosperity Credit Union, we believe getting a mortgage shouldn’t be overwhelming. It should feel like a smart, doable step toward a place you’ll love to call home.

Here’s a simple breakdown to get you started.
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PE
Prosperity Expert
Prosperity Team

Step 1: Understand What a Mortgage Is

A mortgage is basically a loan that helps you buy a home — because let’s face it, not many of us have a few hundred thousand dollars sitting around. You borrow money from a lender (like Prosperity!), agree to pay it back over time, with interest, and use the home as security for the loan.

Prosperity Tip: A bigger down payment usually means a smaller mortgage — and smaller monthly payments too.

Step 2: Know the Key Terms

Here’s the inside scoop on some mortgage words you’ll hear a lot:

  • Down Payment: The money you put down upfront (minimum 5% in most cases).
  • Term: The length of time your mortgage agreement lasts (typically 1 to 5 years).
  • Amortization: The total length of time you’ll take to pay off the mortgage (often 25 years).
  • Fixed vs. Variable Rate: Fixed means your rate stays the same for the term. Variable can move up or down with the market.
  • Pre-Approval: A conditional approval that shows how much you can borrow — and helps you shop with confidence.

Prosperity Tip: Get pre-approved before house hunting! It saves time, stress, and heartbreak over homes that are out of budget.

Step 3: Budget for More Than Just the Mortgage

Owning a home comes with a few extra costs you’ll want to plan for, like:

  • Property taxes
  • Home insurance
  • Utilities (heat, water, electricity)
  • Maintenance and repairs (yes, someday you will need a new furnace)

Prosperity Tip: A good rule of thumb is to budget 1–2% of your home's value every year for maintenance. That way, when the roof leaks, you’re ready — not panicking.

Step 4: Choose the Right Mortgage for You

There’s no one-size-fits-all mortgage. The best one depends on your budget, your plans, and how comfortable you are with risk.
At Prosperity Credit Union, we’ll walk you through options like:

  • Fixed vs. Variable Rates
  • Open vs. Closed Mortgages
  • Flexible Payment Plans (so you can pay off faster if you want!)

Why a Local Mortgage Matters

Getting a mortgage isn’t just about the numbers. It’s about having someone who understands your life, your community, and your goals.

At Prosperity, decisions are made right here at home, not in some faraway office tower. You’ll get advice that makes sense for our local markets — plus real people you can sit down with.

Buying a home is a big deal. You deserve a mortgage partner who’s just as invested in your future as you are. That’s the Prosperity way — local help, real answers, and a clear path to your new front door.