Real Estate Investment Analysis - Loan Amortization Schedule

 

Notes:

• What problem does it solve?
  This code generates a loan amortization schedule for a mortgage, showing the principal and interest breakdown over time.

• How can businesses or users benefit from customizing the code?
  Users can understand how their mortgage payments affect principal reduction and interest over time.

• How can businesses or users adopt the solution further, if needed?
  This can be integrated into property management tools or used to plan refinancing options.

Actual Python Code:

class LoanAmortization:

    def __init__(self, loan_amount, interest_rate, loan_term):

        self.loan_amount = loan_amount

        self.interest_rate = interest_rate / 100 / 12  # Monthly interest rate

        self.loan_term = loan_term * 12  # Convert years to months

    

    def monthly_payment(self):

        # Formula for monthly mortgage payment

        return (self.loan_amount * self.interest_rate) / (1 - (1 + self.interest_rate) ** -self.loan_term)

    

    def amortization_schedule(self):

        balance = self.loan_amount

        monthly_payment = self.monthly_payment()

        schedule = []

        for month in range(1, self.loan_term + 1):

            interest_payment = balance * self.interest_rate

            principal_payment = monthly_payment - interest_payment

            balance -= principal_payment

            schedule.append((month, principal_payment, interest_payment, balance))

        return schedule

# Example usage

amortization = LoanAmortization(loan_amount=300000, interest_rate=4, loan_term=30)

schedule = amortization.amortization_schedule()

for month, principal, interest, balance in schedule[:5]:  # Displaying the first 5 months

    print(f"Month {month}: Principal: ${principal:.2f}, Interest: ${interest:.2f}, Balance: ${balance:.2f}")