A to B Home Loans
1500 E. Hamilton Avenue, Suite 105
Campbell, CA 95008

Tel: (408) 626-4800
Fax: (408) 626-9384

info@atobloans.com

August 12, 2002

Our intention is to give you information about the real estate market and this first newsletter will talk about interest rate trends.

Our economy runs in cycles. These economic cycles effect interest rates. The latest economic cycle we have entered is a slowing of the economy or a recessionary cycle. In a normal recessionary economic cycle, interest rates go down. The reason for this is that the Federal Reserve Board controls the short term interest rates. These are the rates that big banks use to lend money to big corporations. The idea is that when the Federal Reserve lowers the short term interest rates it will entice big corporations into borrowing this money and use it for expansion. When they expand, they hire new employees, come out with new products, etc and put these products into the economy. Thus stimulating economic growth which effects the entire country as well as the world.

Last year the Federal Reserve lowered interest rates eleven (11) times in an effort to stimulate the economy. This lowering of the short term rates has caused the long term rates (mortgage interest rates) to drop. Mortgage interest rates are now at an all time low and now is an excellent time to refinance your loan to get a lower rate, get cash out or to purchase a home.

In recent history there have been two times that interest rates were very low. In October, 1993 and in October, 1998 rates were at their lowest levels. We are approaching those levels now.

Note: the 3/1, 5/1, 7/1 means the loan is fixed for the initial period (3 years, 5 years or 7 years) then it adjusts yearly thereafter. Loans are available to $3,000,000. We also have many adjustable rate programs available.

If you have any questions about this or any other question about real estate or real estate loans, do not hesitate to call me.

Sincerely,
Bob Nastasi