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Past 30-year mortgage

To calculate your monthly payment at 1.95%, you must multiply your loan amount by 3.7. (  100k times 3.7 =$370. principal and interest

This is the general philosophy as to why there is such a high demand for their low payment rate products. The thirty year mortgage worked well in our great-grand parents generation. They lived in a different day and age. Typically the last thing they would do is refinance their note. They believed in paying it off and burning the note, which was wise. How many people do you know today that have had a note burning ceremony lately? They knew if you refinanced the note, it was like starting over. The number of refinances done in those generations in the pre-sixties is miniscule. They typically had one job, no credit cards and a pension fund, a passbook saving account and a retirement account they could count upon. People didn't move as much or get divorced and refinancing wasn't as common. It was a simpler day and age and the 30 year block mortgage served their needs well. It was designed for them. It was a stable financial lifestyle, but times have changed and so have your options.

As a comparison to another industry, people could never imagine that whole life insurance would ever be replaced. Like the 30 year mortgage, it was a fixed, stable, safe product. People today, in the modern age, are requesting more sensible options and more updated products. Term insurance captured the market with time, for the math made sense. Rates on term insurance are not fixed and rates could go up, but people looked at the long term picture. It was a more intelligent way to handle the product. People had to learn to think outside the box, and now the product dominates. Only a few lenders in America are offering these flexible cash flow plans and it has been said that this is a more intelligent way to handle a mortgage. Some day this could be the way that most mortgages are done. It has been called the term insurance of the mortgage industry, because of it's cash flow appeal to the public.
Today times have changed from when the 30 year block payment note was designed. Why pay a higher payment for 30 years unless you are going to be the rare one who pays it undisturbed. Unlike the old days, people today have 5 or 6 jobs, and they are moving around constantly, Americans have approximately 8k in credit card debt, and inadequate retirement funds. It has been said that people will need 400k plus in the future to retire, because of the increased cost of living and the fact that people are living longer. If Americans do not plan ahead, their golden years may be spent under the golden arches. Social security could run out unless taxes are raised 65%, which is unlikely, so we really can not depend upon the government to support us in retirement.

Most Americans have totally inadequate college funds as well. The cost of college is extremely high at 10k plus per year. It is difficult for most to find the cash flow to jump start a respectable saving program. People have more expensive homes and larger mortgage payments. Many find it difficult to locate the cash flow to even have a reserve account for emergencies, which can lead to financial instability. The first step to financial stability and security is to have six months salary in a reserve account in case of layoffs, emergencies or illness. Cash flow eliminates stress and provides stability to families. Many people simply do these plans because they don't need or want the stress of a high mortgage payment. They don't want to be a slave to their house, especially as they approach retirement.