Loan - mortgage

A bit of theory

We programmed this calculator to familiarize ourselves with time series, geometric series, and the value of money over time. Interest is the price of money. If I borrow money at 5% interest per year, for example, 1000 euros, I have to pay back 1050 euros in a year.
The thing about a mortgage is that it's a lifetime loan, as people say. A person wants to buy, e.g., a large family home that costs, for example, a hundred times his monthly income. He doesn't want to eat or drink for 100 months, just save money, but he wants the house immediately. More precisely, it means that a person says to himself, I am willing to repay 250 euros every month but for 30 years.
This will hurt me less than deferring the entire salary for 10 years, not going anywhere on holidays, and living entirely ascetically. So I went to the bank and told them about my income. The bank will deduct living wages for me and my children if I have any. He will calculate how much I actually have left for the mortgage payment. Then, it calculates how many years I will be able to earn. There is a difference between taking a mortgage as a 20-year-old and another as a 50-year-old. The closer to retirement, the less the bank will lend. It's logical. The bank multiplies both data, the amount of the possible repayment and the number of months of repayment, and we get the maximum mortgage amount. This is a limited amount that we can pay for our dream house. That's why we only look at ads up to the maximum mortgage amount. The bank will not lend us more. Spouses are at an advantage as their income is added together.

To make lending money a bit fair, interest is always paid only on the amount owed. That is the essence of a mortgage loan. I pay practically the same installments over a long period, and my credit is gradually being reduced. At the end of the agreed period, I will fully repay the debt to the bank with the last installment. At the beginning of the repayment, I owed a lot of money, so most of the repayment was interest. However, the principal is gradually repaid, and the total debt decreases. The task of this calculator is to calculate the amount of one installment and the entire installment schedule. It's an excellent algorithmic problem that you can't just calculate on a calculator, but it's easy and fun for a computer.

I have respect for people who have mortgages and who have committed themselves to work for, for example, 30 years straight; they will rule. When they live to be in their 60s, for example, they pay the last installment, and the obligation is repaid. Of course, few people take out a lifetime mortgage. Most have something set aside and apply for a mortgage for, for example, 15-20 years. But still, it's a considerable period. In just my 40 years of life, I was paid in 3 currencies - Czechoslovak crown 1 CZK, Slovak crown 1 Ks, and the euro. By that, the world in another 20 years will probably be completely different.

A mortgage is a lifetime loan, usually based on real estate. I want the maximum amount of money from the bank that I will be able to pay back while I am alive (e.g., work until retirement age).

Similarly, other variants of mortgage loans are also possible, such as reconstruction or extension. For example, I own a property and don't want to work. This is done by taking out a mortgage on the property while I can work. I will start a real estate. The bank sends money to my account, which I send back in small installments. In addition, I am either looking for a real estate buyer or a job. The property can be sold with a mortgage, which is usually done that way.

A reverse mortgage is when I want money in the value of the property on the account; I want to spend it, e.g., traveling the world. However, I still need the property to live in. So I will reverse mortgage it - the bank will own it only after my death, not the heirs. I have the money immediately, and the bank the property only after my death. Ideal for childless people or those who want to avoid disputes between heirs and, for example, divide the reverse mortgage between themselves and the heirs in a proportion according to their discretion. It also solves the problem of the heirs, that they don't have to wait for the inheritance... but enjoy the property of their parents when they need it the most. Not until the death of the testators.