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Scenario 2 An investor obtained a fully amortizing mortgage 5 years ago for $95,000 at...

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Scenario 2 An investor obtained a fully amortizing mortgage 5 years ago for $95,000 at 11% for 30 years. Mortgage rates have dropped, so that a similar 25 -year loan can be obtained at 10%. There is no prepayment penalty on the original loan but 3 points and a $2,000 loan fee are charged on the new loan at origination. Based on Scenario 2 above, what is the yield earned on the upfront refinancing costs if she plans to own the property for only 5 more years? 1.23% 0.60% 0.98% 1.64% 0.25%

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