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Solutions and options for debt reduction

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

There are a variety of motivations, but the point is that times have changed and so have your options with a mortgage. The 30 year mortgage is a bit outdated for some people. It's all about the math and flexibility.
The basic core problem seems to be that most people are refinancing every five years to seven, which can be a dangerous trend and detrimental to their financial security. It is a trend caused by cash flow needs such as home improvement, cash out and borrowing equity from their home for a variety of reasons. There is a whole segment of the economy who refinance over and over fairly consistently. It has become all too easy and is a cycle that is well established, but needs to be broken.

Basically this product is not designed for everybody. If a person has a retirement and a saving plan and has not refinanced in the last five to ten years, then this plan is not for them. Look closely at an amortization schedule and examine the balances from the first year to the fifth year. A thirty year mortgage was designed in a deliberate way to tremendously benefit the lender. The first few years, the client does not build up much principal. On a $1592. payment, principal and interest, at 6.5% for 250k, you are paying approximately $214. a month principal the first year. After five years you have paid about 1.26% a year average on your principal. If you refinance again and start over at that point, you have a downhill cycle. After 20 years of doing that every five years, at 1.26% average a year being paid on the balance, you have a detrimental situation and you will still owe 76% of your balance and 30 years to pay.