Choose The Rate - Mortgage Glossary

Welcome to Choose The Rate Glossary page. Please use this section to familiarize yourself with all of the terms and wordings used by the mortgage and lending worlds.

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Accessorial (Additional) Services:
	Services such as packing, appliance servicing or unpacking that you request to be performed (or are necessary because of landlord requirements or other special circumstances). Charges for these services are in addition to the transportation charges.

Adjustable-rate Mortgage (ARM):
	An Adjustable-rate Mortgage (ARM) is a mortgage loan with an interest rate subject to change over the term of the loan. The interest rate is tied to the performance of a specified market rate, such as the cost of funds index calculated by the 11th District of the Federal Home Loan Bank Board, or the yields on one-year or six-month U.S. Treasury securities. The amount of times the interest rate can change and how often it can change are usually determined at the time the loan is created. Usually there is also an interest rate maximum that is set for the loan. One thing to remember regarding adjustable rate mortgages is that even a minor increase in interest rates can greatly affect the monthly payments on a mortgage loan. For example, a 30-year mortgage on a $250,000 loan at 5.5% results in a monthly payment of $1419. If, over time, interest rates rise to 7%, the monthly payment jumps to $1663 for a difference of $244 per month or almost $3000 more per year. When reviewing an adjustable rate mortgage loan, make sure that interest rate changes and subsequent increases in monthly payments will not stretch your budget beyond its limits. The benefit of an adjustable rate mortgage is that it generally has lower fees and a lower interest rate than a fixed rate mortgage. There are also many more variations of adjustable rate mortgages, allowing borrowers more flexibility and ease when getting that first home loan. Also, if rate drop significantly, borrowers with adjustable rate mortgages will automatically benefit from a lower rate without having to refinance. Something to consider regarding adjustable rate mortgages is that if interest rates are hitting their all time lows and are expected to rise in the near future, it may be a good time to refinance to a fixed rate mortgage loan and lock in the low rate.

Advanced Charges:
	Charges for services not performed by the mover but instead by a professional, craftsman or other third party at your request. The charges for these services are paid for by the mover and added to your bill of lading charges.

Amortization:
	The paying down of principal over time. In a typical mortgage loan, the principal is scheduled to be paid off, or fully amortized, over the term of the loan.

AMSA Certified Mover: Mover:
	An interstate carrier that transports your household goods shipment under its own operating authority, granted by the Federal Highway Administration. AMSA Certified Movers subscribe to the AMSA Code of Conduct and have pledged to conduct their business in the most efficient and professional manner possible.

AMSA Certified Van Line:
	An interstate carrier that transports your household goods shipment under its own authority, granted by the Federal Highway Administration, on a national basis. Van Lines use a network of agents throughout the country to provide the origin, destination and hauling services needed to accomplish your move. Like Certified Movers, AMSA Certified Van Lines subscribe to the AMSA Code of Conduct. They have pledged to conduct their business in the most efficient and professional manner possible and are responsible for the acts of their agents.

Appliance Service:
	Preparation of major electrical appliances to make them safe for shipment.

Average Hourly Earnings:
	A monthly reading by the Bureau of Labor Statistics of the earnings of hourly plant and nonsupervisory workers in the private sector. While the AHE excludes salaried workers (unlike the employment cost index), it is available each month with only a brief lag. Released by BLS as part of the Employment Situation release, the report is generally issued on the first Friday of the month for the prior month.

Basis Point:
	One one-hundredth of a percentage point. For example, if mortgage rates fall from 7.50% to 7.47%, then they've declined 3 basis points. A full percentage point is 100 basis points.

Bill of Lading:
	The receipt for your goods and the contract for their transportation. It is your responsibility to understand the bill of lading before you sign it. If you do not agree with something on the bill of lading, do not sign it until you are satisfied that it is correct. The bill of lading is an important document. Don't lose or misplace your copy.

Binding/Non-Binding Estimate:
	A binding estimate is an agreement with the mover made in advance of the move. It guarantees the total cost of the move based on the quantities and services shown on the estimate. A non-binding estimate is the carrier's approximation of the cost based on the estimated weight of the shipment and the accessorial services requested. A non-binding estimate is not binding on the carrier and the final charges will be based on the actual weight and tariff provisions in effect.

Carrier:
	The mover providing transportation of your household goods.

Cash-out Refi:
	A refinancing of a mortgage in which the new principal (the borrowed amount) exceeds the outstanding principal of the original loan by at least 5%. In other words, the homeowner is taking equity out of the home. Of the mortgages it owned that were refinanced during the first three quarters of 2000, Freddie Mac estimates that more than 4 out every 5 were cash-out refis.

C.O.D.:
	Stands for cash on delivery. Transportation for a private shipper may require C.O.D. at the time of delivery at the destination residence (or warehouse).

Conforming Mortgage Loan:
	Any mortgage loan that's at or below the amount that Fannie Mae and Freddie Mac can purchase and/or securitize in the secondary mortgage market. For 2001, the loan limit is $275,000. In 2000, it was $252,700.

Construction Loan:
	A construction loan is a temporary loan usually lasting six months to a year that is used to pay for the building of a house. Construction loans are paid off by a long-term mortgage loan on the completed home. The funds from a construction loan are paid out in stages over the course of the building project and the lender usually is involved throughout the course of construction, reviewing completed work at various stages. Construction loans are also very closely tied to the final mortgage on the property. Borrowers must apply for the residential mortgage and be approved prior to applying for the construction loan. The construction loan and the long-term mortgage loan on the finished house are often tied together in what is called a "construction/perm loan." The benefits of this are reduced closing costs and an easier application and approval process. Essentially you are applying for one loan instead of two.

Consumer Confidence Index:
	A measure of confidence that households have in the economy. Released by the Conference Board late in the month.

Consumer Price Index (CPI):
	A measurement of the average change in prices paid by consumers of a fixed market basket of a wide variety of goods and services. The broadest, and most quoted, CPI figure reflects the average change in the prices paid by urban consumers (about 80% of the U.S. population). The so-called "core CPI" excludes the volatile food and energy sectors in an attempt to determine the underlying rate of inflation. Strictly speaking, the CPI is not a "cost of living" index because its fixed market basket does not allow for the substitution of goods and services due to price changes. The CPI is released by the Bureau of Labor Statistics in mid-month for the previous month.

Conventional Mortgage Loan:
	Any mortgage loan not guaranteed or insured by the government (typically through FHA or VA programs).

Credit Report:
	A credit report shows borrowing and repayment history. It shows the amount of an individual's past and present debts and whether any debt payments have been missed. Debts can include money owed on credit cards, auto loans, mortgages and more. Credit reports also show an individual's address history, indicating how often and to what extent a person has moved. Lenders use the credit report information to determine a loan applicant's borrowing potential and interest rate. A credit report that shows late payments on debt may cause a lender to charge a higher interest rate or not lend at all. In addition, a credit report that shows little or no history of borrowing can also raise the interest rate. Lenders prefer to see some history of borrowing and repayment rather than none at all. Three main companies track the credit histories of individuals and issue credit reports. These are Equifax, Trans Union and Experian. These companies get their information from a variety of sources including creditors and public records.

Credit Score:
	A credit score is a number based on an individual's credit report that indicates overall credit risk. If a borrower has a high credit score, he or she is considered more likely to be able to pay off debt in a timely manner. A low credit score indicates higher credit risk and may cause a lender to charge a higher interest rate or not extend credit at all. The most common type is called a "FICO" score, named after the Fair Isaac Company that created it. FICO scores range from 350 to 850 with the median score falling around 720. A score above 750 gives a borrower the best chance of securing the lowest possible interest rate on a loan. High scores qualify for lower interest rates and increase the number of lenders competing to provide the loan. Components that determine an individual's credit score include their borrowing and payment history, the length of this history, the amounts currently owed, the types of credit used and the level of recent credit history.

Employment (Payroll):
	The number of nonfarm employees on the payrolls of more than 500 private and public industries. Generally issued on the first Friday of the month for the previous month by the Bureau of Labor Statistics, and one of the most watched economic indicators in the financial markets.

Employment Cost Index:
	A quarterly index used to gauge the change in the cost of civilian labor. Unlike the average hourly earning measure, the ECI includes salaried workers. Another advantage of the ECI is that changes in the index are independent of shifts in the composition of the workforce (that is, the index is not affected by, say, a surge in the number of lower-paying jobs relative to high-paying jobs because it uses fixed employment weights. Instead, the ECI reflects the change in the employment costs of the same set of jobs). The index has two major components: the wage and salary series and the benefits series. The survey is conducted during pay period including the 12th day of March, June, September and December. The Bureau of Labor Statistics releases the results about six to seven weeks after the survey period. The less comprehensive average hourly earnings figure is a more timely indicator, as it's released monthly, usually within a week after month's end.

Existing Home Sales:
	Based on the number of closings during a particular month. Because of the one-to-two month period between a signed purchase contract and a closing, existing home sales are more influenced by mortgage rates a month or two earlier than the prevailing mortgage rate during the month of closing. New homes sold, on the other hand, are counted when the purchase contract is signed. The reported figure is generally a seasonally adjusted, annual rate. Data are released by the National Association of REALTORS® on the 25th of each month (or the following business day) for the previous month.

Expedited Service:
	An agreement with the mover to perform transportation by a set date in exchange for charges based on a higher minimum weight.

Fannie Mae and Freddie Mac:
	The nation's two federally chartered and stockholder-owned mortgage finance companies. Forbidden by their charters from originating loans (that is, from providing mortgage loans on a retail basis), these two Government-Sponsored Enterprises (GSEs) purchase and/or securitize mortgage loans made by others. Due to their directive to serve low-, moderate-, and middle-income families, the GSEs have loan limits on the purchase or securitization of mortgages (in 2001, the conforming loan limit is $275,000). The difference between these two entities often comes down to size (Fannie's larger), business strategy and execution.

Federal Funds Rate:
	Also known as the fed funds rate, this is the rate that banks charge each other on overnight loans made between them. These loans are generally made so that bank can cover their daily cash flow and reserve requirements. As the rate rises, banks have an increased incentive to keep more of their own cash on hand - making less money available to lend out to households and businesses. The Fed doesn't actually set the fed funds rate, which is determined by supply and demand of the funds; instead, it sets a target rate and, through its own purchases or sales of securities, affects the supply of funds.

Federal Open Market Committee (FOMC):
	The arm of the Federal Reserve that sets monetary policy, the FOMC is scheduled to meet eight times a year. The 12 members of the FOMC include the seven governors of the Federal Reserve System, the president of the New York Federal Reserve Bank, and, on a rotating basis, four of the presidents of the other 11 regional Federal Reserve Banks.

Fixed-rate Mortgage (FRM):
	A fixed-rate mortgage (FRM) is a mortgage loan with an interest rate that does not change over the term of the loan. At the time the loan is created, the rate is set and the borrower will not be subject to fluctuations in interest rates due to changing market and economic conditions. A fixed rate mortgage usually comes with higher fees or interest rates than an adjustable rate mortgage and is best when rates are expected to rise significantly in the future. While borrowers with fixed rate mortgages don't benefit from drops in interest rates, they still have the option of refinancing the mortgage loan to take advantage of the lower rate and reduced monthly payment. The only drawback is the cost of refinancing which should, if you are refinancing at a significantly lower rate, be offset by your savings in interest payments. To recap, the main risks of a fixed rate mortgage are higher closing costs and potential additional closing costs when the borrower refinances to take advantage of a drop in interest rates. The main benefit is the peace of mind knowing that the mortgage rate and monthly payment on your home loan will not change, even if market interest rates triple.

Flight Charge:
	An extra charge for carrying items up or down flights of stairs.

Freddie Mac:
	See entry for Fannie Mae.

Gross Domestic Product (GDP):
	The value of all the final goods and services produced in the U.S. over a particular period. Available from the Bureau of Economic Analysis toward the end of the first month following the end of a quarter, and revised in each of the following two months. Growth in inflation-adjusted GDP, or real GDP, is the figure most often quoted. The GDP figures before adjustment for inflation are known as nominal GDP.

Guaranteed Pickup and Delivery Service:
	An additional level of service whereby dates of service are guaranteed, with the mover providing reimbursement for delays. This premium service is often subject to minimum weight requirements.

High Value Article:
	Items included in a shipment that are valued at more than $100 per pound. These items should be disclosed to the mover to ensure they are protected accordingly.

Home Equity:
	Home equity is the difference between the current value of the house and the amount of money owed on the mortgage. For example, if you owe $75,000 on your mortgage, there are no other liens on the property and the current market value of your home is $125,000, then the home equity amount is 125,000 - 75,000 = $50,000. The down payment that you make when purchasing a home will provide you with some initial equity.

Home Equity Line of Credit:
	A home equity line of credit (HELOC) is a loan that allows you to borrow money when you need it. The amount you can borrow is based on the appraised value of your home and you can borrow and repay as much and as often as you like. The only requirement is that you make a monthly payment to cover the cost of the interest on the amount borrowed. A home equity line of credit is like having a credit card with a low interest rate and high credit limit. Because it is secured by the value of your home, lenders can offer much lower interest rates than a standard credit card company. And your credit limit can be up to 80 percent of the appraised value of your home so you have a potentially much greater borrowing capacity.

Home Equity Loan:
	A home equity loan is a loan that is secured by a home and limited by the current market value of the home and any additional liens or mortgages that exist. A home equity loan is also known as a second mortgage and home owners can sometimes borrow up to 125% of their homes appraised value. For example, if the home is worth $200,000 and there is a mortgage on the home of $150,000 with no other liens on the property, then the amount available for a home equity loan may be as much as $250,000 - $150,000 = $50,000. The full 125% of the appraised value may not be available in all cases and every lender will have unique requirements and limitations. Home equity loans are used in place of other types of loans when cash is needed for bills and other expenses because the interest is tax deductible and the interest rate is lower in many cases. Borrowers can still use the money from a home equity loan to buy cars or pay for a child's college tuition. Unlike a home improvement loan or construction loan, the money does not have to be spent on the home itself and can be used for anything the borrower wants. With home equity loans, borrowers can put their home equity to work for them by using the equity to buy income property or other sound investments. One thing to remember is that a home equity loan will reduce your equity in the home by the amount of the loan and will increase your monthly mortgage payment. As with any financial or investment decision, you should first consult with a financial advisor.

Home Improvement Loan:
	A home improvement loan is money lent to a property owner for home repairs, updates or remodeling. Home improvement loans are not necessarily secured by the property they are intended for and may simply be classified as home improvement loans by the lender. These loans can be secured or unsecured and are usually short term. Home improvement loans are intended to increase the value of your home so it is important to think carefully about where best to put the money. After all, the money spent on home improvements is added to your overall cost of the home and you want to be able to recoup this cost if and when you decide to sell.

Home Loan:
	A home loan is money provided to you by a bank or lending institution to pay for your home. In return, the bank holds the title to your home until you've paid back the loan plus interest. The money lent to you in a home loan is "secured" by the home itself. This means that in the event that you are unable to pay back the loan, the lending institution has the right to sell the property in order to pay back the loan in a process known as foreclosure. A home loan is also known as a mortgage and has many variations with different terms and interest rates. One of the key benefits of a home loan is that the interest paid on the loan is tax deductible. Home owners can deduct interest on up to one million dollars of their mortgage debt. This can translate into huge savings in income tax.

Homeownership Rate:
	The number of households residing in their own home divided by the total number of households. Late in the month following the end of each quarter, the U.S. Census Bureau releases an estimate based on a quarterly survey. A record homeownership rate of 67.6% was reached in the fourth quarter of 2000.

House Price Index:
	A quarterly measure of the change in single-family house prices. The HPI is a repeat sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties, and is based on mortgages purchased or securitized by Fannie Mae and Freddie Mac. Homes with mortgages above the Fannie/Freddie conforming loan limit (in 2001, it's $275,000) are not included in the sampling, nor are homes insured or guaranteed by the FHA, VA or other federal government entity. This index is distinct from the similarly constructed Conventional Mortgage Home Price Index published by Freddie Mac. Indexes are available for the nation, nine Census regions, each of the 50 states and the District of Columbia, and 329 Metropolitan Statistical Areas (MSAs). Released by the Office of Federal Housing Enterprise Oversight (OFHEO) on the first business days of March, June, September and December for the previous quarter.

Housing Starts:
	The Census Bureau's monthly count of the number of private residential structures on which construction has started. Data for a particular month is released about two weeks into the following month. Data on permits issued is also released. The reported figure is generally a seasonally adjusted, annual rate.

Interest Rate:
	An interest rate is a measure of the cost of borrowing. This rate determines how much money will be paid back to the lender in addition to the amount borrowed. When borrowing money over a long period of time, even the slightest adjustment in the interest rate can make a huge difference in the actual amount of money paid back to the lender. It is important to shop around for the lowest possible rate and also to refinance when interest rates drop.

Inventory:
	The detailed descriptive list of your household goods showing the number and condition of each item.

Jumbo Mortgage Loan:
	A mortgage loan for an amount exceeding the Fannie Mae and Freddie Mac loan limit. Any residential mortgage loan over $417,000 is considered a jumbo loan. Because the two agencies can't purchase the loan from the lender, jumbo loans carry higher interest rates, generally about a quarter of a percentage point.

Line Haul Charges:
	Charges for the vehicle transportation portion of your move. These charges apply in addition to the additional service charges.

Loan-to-value Ratio (LTV):
	In a mortgage loan, the amount borrowed relative to the value of the property. An LTV of 80% means that the mortgage loan is for 80% of the value of the property, with the borrower making a 20% downpayment.

Long Carry:
	An added charge for carrying articles excessive distances between the mover's vehicle and your residence.

Line Haul Charges:
	Charges for the vehicle transportation portion of your move. These charges apply in addition to the additional service charges.

Loan-to-value Ratio (LTV):
	In a mortgage loan, the amount borrowed relative to the value of the property. An LTV of 80% means that the mortgage loan is for 80% of the value of the property, with the borrower making a 20% downpayment.

Long Carry:
	An added charge for carrying articles excessive distances between the mover's vehicle and your residence.

Mean Home Price (of New or Existing Homes Sold):
	The mathematical average of the prices of all homes sold in the period. The mean price of homes sold generally runs higher than the median price due to the number of very high-priced homes. The National Association of REALTORS® usually releases home price figures for existing homes sold on the 25th of the month for the previous month; corresponding figures for new homes are released a few days later by the Bureau of Census.

Median Home Price (of New or Existing Homes Sold):
	Of all the homes sold during the particular period, precisely half sold for more than the median price, and half sold for less. When determining the median, only one home price matters - that of the home in the middle. Because homes sold for exceedingly low or high values only count as one unit when determining the median - i.e., their values don't matter - median home prices are generally a better indicator of home price trends than mean, or average, home prices (where all the values matter). The National Association of REALTORS® usually releases home price figures for existing homes sold on the 25th of the month for the previous month; corresponding figures for new homes are released a few days later by the U.S. Census Bureau.

Mortgage:
	Mortgage loans are long term loans, usually spanning 15 or 30 years, that are directly tied to a home or other piece of real estate property. The borrower acquires a mortgage loan in order to take possession of their home. While the borrower, also known as the mortgager, has ownership and use of the property, he or she does not hold the actual title until the mortgage loan has been paid back in full. Mortgage loans come in many forms and with many options and terms. Some common types are fixed and adjustable-rate mortgages. Borrowers can either lock in a fixed interest rate or let the rate change as rates change in the market. Even though mortgages are long term loans, they can be paid off in full through a process known as refinancing. Essentially, the borrower gets a new mortgage on the home and uses the proceeds to pay off the existing mortgage. If you are considering refinancing your home, there are several factors you should think about before making your decision. These factors include the interest rate on your current mortgage, the current market interest rate, how long you plan to live in your current home, and whether or not you need money for other things such as home improvements, a new car loan, or paying off credit cards.

Mortgage Application Index: Purchase:
	An index published weekly by the Mortgage Bankers Association of America which gauges the number of applications submitted for the purchase of a home. The survey covers about 40% of all retail residential mortgage transactions and is released every Wednesday for the week ending the previous Friday.

Mortgage Application Index: Refinance:
	An index published weekly by the Mortgage Bankers Association of America which gauges the number of applications submitted for the refinancing of a home. The survey covers about 40% of all retail residential mortgage transactions and is released every Wednesday for the week ending the previous Friday.

Mortgage Broker:
	Many lenders use the services of a mortgage broker to perform what is known as the "Origination" of the loan - to meet with and pre-qualify the borrower, verify the credit and property aspects of the loan, and then provide it to the lender for actual funding. Mortgage brokers represent the consumer. Their goal is to try to understand the needs of each consumer as well as possible and then identify and source the best loan possible for that consumer. Mortgage brokers typically generate their customers either from marketing directly to consumers or through referrals from happy customers. Be sure that you ask for customer referrals when selecting a mortgage broker.

Mortgage Loan:
	A mortgage loan is money lent for the purpose of buying real estate. Mortgage loans are secured by the property that they are used to buy. If the borrower or "mortgagor" fails to pay back a mortgage loan, the lender can seize the property in a process known as foreclosure. There are many different types of mortgage loans available and each one is designed for a specific purpose. Some are more flexible that others and it is important to learn a little about each type to better determine which one is right for you. It's like shopping for anything else. You need to see all of what's out there before you can make the final decision.

Mortgage Quote:
	A mortgage quote is an interest rate offered to a borrower by a lender for a home loan. The mortgage quote is tied to a number of factors including the loan type, loan length and the credit history of the applicant and can vary quite a bit among lenders. Mortgage quotes are an important step in purchasing or refinancing a loan. Mortgage rates can change hourly so it is important to check rates frequently and when you do make a decision, make sure you find out if the mortgage quote you have been given has any expiration period associated with it. When considering a mortgage rate, be sure to understand not only the specific interest rate you are paying but also whether or not your loan is an interest-only loan or you are paying off principal at the same time. You should also be sure to understand the term of your mortgage, is it a 5 year, 10 year, 30 year or one of the many hybrid variations available. Depending upon the number of years, the amount you end up paying in interest and principle and vary enormously. Lastly, be sure to find out if there are any other costs associated with closing your mortgage that are not included in your mortgage quote. Generally mortgage quotes do not include closing costs, property taxes, insurance costs, PMI costs and other miscellaneous costs which are all important costs to understand when thinking about what you can afford.

Mortgage Rate:
	A mortgage rate is the amount of interest charged on the money lent for the purchase of a home. Mortgage rates are expressed annually as a percentage and have fluctuated greatly over the years. These rates are tied specifically to the purchase of real estate property and the loans associated with them are secured by the property. Mortgage rates can also vary greatly by lender and borrower and are based on many factors including market conditions, the loan type, geographic location, the loan term and the credit history of the borrower. When mortgage rates go up, it becomes more expensive to borrow money for the purchase of a home. As mortgage rates drop, consumers are able to afford to borrow more money and purchase a more expensive home. When mortgage rates drop, existing homeowners with fixed-rate mortgages should consider refinancing to lock in the lower rate.

Mean Home Price (of New or Existing Homes Sold):
	The mathematical average of the prices of all homes sold in the period. The mean price of homes sold generally runs higher than the median price due to the number of very high-priced homes. The National Association of REALTORS® usually releases home price figures for existing homes sold on the 25th of the month for the previous month; corresponding figures for new homes are released a few days later by the Bureau of Census.

Median Home Price (of New or Existing Homes Sold):
	Of all the homes sold during the particular period, precisely half sold for more than the median price, and half sold for less. When determining the median, only one home price matters - that of the home in the middle. Because homes sold for exceedingly low or high values only count as one unit when determining the median - i.e., their values don't matter - median home prices are generally a better indicator of home price trends than mean, or average, home prices (where all the values matter). The National Association of REALTORS® usually releases home price figures for existing homes sold on the 25th of the month for the previous month; corresponding figures for new homes are released a few days later by the U.S. Census Bureau.

New Home Sales:
	The Census Bureau surveys builders nationwide and bases their figure on the number of contracts signed for new homes. Because it reflects contracts rather than closings (as is the case with existing home sales), new homes sold should more quickly reflect changes in mortgage rates and the economic environment. The reported figure is generally a seasonally adjusted, annual rate.

Order for Service:
	The document authorizing the mover to transport your household goods.

Order (Bill of Lading) Number:
	The number used to identify and track your shipment.

Peak Season Rates:
	Higher line haul charges that are applicable during the summer months.

Pickup and Delivery Charges:
	Separate transportation charges applicable for transporting your shipment between the SIT warehouse and your residence.

Producer Price Index (PPI):
	A measurement of the average change in the selling prices of goods and services sold by domestic producers, and therefore an indicator of inflation. The most quoted PPI figure is the change in the prices of finished goods, that is, goods that are ready for sale to the final user (either households, businesses or governments). The so-called "core PPI" reflects the changes in price of finished goods excluding food and energy. The finished-good PPI and the Consumer Price Index differ due to the latter's inclusion of distribution costs, sales taxes, and government subsidies, as well as the types of products covered. The PPI is released by the Bureau of Labor Statistics in mid-month for the previous month.

Productivity:
	The measure of output per hour, and one of the most critical indicators of an economy's long-term health. Unfortunately, it's also very tricky to measure, especially in the services industries. Growth in productivity allows wages to rise while prices remain stable. The Bureau of Labor Statistics publishes quarterly productivity figures eight times a year (including revisions).

Refinance:
	Refinancing is when you get a new loan to pay off an existing loan on the same house. Your new home loan may have different terms, a lower interest rate or be larger than the amount of debt owed on your existing loan. In the case of the latter, you would end up with a cash surplus known as "equity take out." Your are taking equity from your home and converting it into cash to pay for other things. Home refinancing is often done when interest rates drop because home owners can lock in a lower rate and lower their monthly payments. It is also a great way to consolidate bills and pay off expensive credit card debt.

Second Mortgage:
	A second mortgage is a mortgage on real estate which has already been pledged as collateral against another mortgage, the first mortgage. The second mortgage typically has rights to the same real estate but those rights are subordinate to the rights of the primary or first mortgage. When getting a second mortgage, the lender will typically only lend up to the difference between the total estimated value of the real estate minus the first mortgage. Like all mortgages, lenders will also consider your cash flow to ensure that you can afford to make their interest and principal payments on top of your other mortgage payment commitments. Like standard mortgages, second mortgages can have varying terms, ranging from a year up to 20+ years depending upon your personal situation. Second mortgage rates and costs tend to be similar to other mortgage rates and costs although sometimes second mortgages are more expensive to reduce the risk lenders are taking by being subordinate to the primary lender.

Securitization:
	The pooling of mortgage loans into a mortgage-backed security. The principal and interest payments from the individual mortgages are paid out to the holders of the MBS security.

Shuttle Service:
	Use of a smaller vehicle to provide service to residences that are not accessible to the mover's normal line haul equipment.

Storage-in-Transit (SIT):
	Temporary warehouse storage of your shipment pending further transportation. For example, if your new home isn't quite ready to occupy you might use SIT. You must specifically request SIT service, which may not exceed a total of 180 days of storage, and you will be responsible for the added charges for SIT service, as well as the warehouse handling and final delivery charges.

Underwriting:
	The determination of the risk a lender would assume if a particular mortgage loan application is approved. Ability and willingness to abide by the mortgage loan terms, as well as the value of the property involved, are critical to the underwriting analysis.

Unemployment Rate:
	The percentage of the labor force out of work. To be considered a member of the labor force, an individual must either be employed or actively looking for employment (so those without jobs who are not looking for work are not, technically, unemployed). Released by the Bureau of Labor Statistics on the first Friday of the month for the previous month.

Valuation:
	The degree of "worth" of the shipment. The valuation charge compensates the mover for assuming a greater degree of liability than that provided for in the base transportation charges.

Warehouse Handling:
	An additional charge applicable each time SIT service is provided. This charge compensates the mover for the physical placement and removal of items within the warehouse.