What is the after tax effective cost of funds for a 33 percent tax bracket borrower for a $300,000 loan at 6 percent interest, with monthly payments amortized over 30 years if the lender charges 1 point at origination and the borrower will incur $6,100 in third party loan costs? Assume the loan is outstanding for the full loan term, which is eight years.

1 6.51%

2 4.36%

3 6%

4 7%