Bankrate's financial glossary
Did you run across an unfamiliar term when applying for a mortgage, credit card
or auto loan? Find the meaning here, along with definitions of other financial words
and phrases, in Bankrate.com's financial glossary.
As calculated by lenders, the percentage of income that is spent on housing debt and combined household debt. The first qualifying ratio, called the front ratio, is the percentage of monthly before-tax income that goes toward a house payment. The back ratio is the sum of the house payment and all other monthly debt -- credit cards, car payments, student loans and the like -- divided by before-tax income.
Qualified retirement plan
A retirement plan approved by the IRS that allows for tax-deferred accumulation of investment income. Individual retirement accounts, Keogh plans and pensions are examples of qualified retirement plans.
Qualified adoption expenses
For the adoption credit, reasonable and necessary expenses for adopting your child, including such expenses as adoption fees, attorney fees and other expenses. However, expenses paid for a surrogate parenting arrangement or expenses paid to adopt your spouse's child are not allowed.
You must not remarry and have a dependent child living with you to qualify for this status. This status is available for up to two years following the year of your spouse's death.
Qualified Medicare beneficiary
Someone living below the federal poverty guidelines for whom the government is required to pick up premiums, deductibles and co-pay costs for Medicare Part B (basic medical) coverage.
The quick ratio, sometimes called the acid test ratio, is similar to the current ratio, but is considered a more reliable indicator of a company's ability to meet its short-term financial obligations. Because inventory can sometimes be difficult to liquidate, this ratio deducts inventory from your assets before computing the ratio. Potential creditors like to use this ratio because it reveals a company's ability to pay off under the worst possible conditions. To calculate it, take current assets, subtract inventories, then divide by current liabilities.
A document that transfers the grantor's interest in a title to property and is filed with a county recorder. It often is used among family members and can be used to clear up a gap in the chain of title.
Quit claim deed
The formal document by which a claim in property is denied. Often used to clear a cloud on title.
Qualified domestic trust
(QDOT) A trust arrangement where a noncitizen spouse can take advantage of the unlimited marital deduction. The assets placed in a QDOT are taxed when the surviving spouse dies or receives a nonhardship distribution of trust assets during his lifetime.