This problem--that the Ded Hom Mort worksheet works incorrectly for multiple 1098s in the Desktop app--has been around for three years now. It affects two circumstances: refinances, and deductible mortgages on more than one property. It's especially a problem for those of us whose mortgages exceed the $750k or $1m limit. Each year TT promises then fails to deliver a fix, so it's probably overoptimistic to expect one this year.
There are three ways to "solve" the refi problem. I should say right off I'm simply reporting my own experience and choices, and in no way providing expert advice.
The first is simple but feels risky (and it still works): merge the 1098s for the refi into one composite. Add the "interest paid" entries together, so that the total interest reported matches what the IRS gets, and use the earliest and latest data as appropriate for the other fields. This yields an "average" principal and associated interest limit that in effect assumes the refi happened on July 1, but that's usually not far off the mark.
The second is equally simple (and worked in the past): Use the Pub 936 instructions to calculate the average balance using a spreadsheet, then override the entries in Ded Hom Mort lines 12-14 to reflect that external calculation and the total interest from the 1098s.
The third is messier (but matches Pub 936, and I think will still work): Override the entries in the several columns of Ded Hom Mort Part 1 so that they accurately reflect the several 1098s, which should cause the entries in lines 12-14 to match the Pub 936 instructions.
If the non-updated Ded Hom Mort keeps preventing filing even with the overrides, then the first solution is the way to go (and it's what TT CSAs have been suggesting; it's low risk, since the total interest being reported matches the total sent to the IRS, and the limit is being calculated reasonably. If one refied near the beginning of the year, and got a much lower rate, then it might also be worth overriding line 12 with the average calculated more carefully per Pub 936.
