Affording a rental apartment can be next to impossible for some newcomers, particularly those who prefer to rent alone, as well as recent college graduates without much credit history. With NYC’s strict income requirements (earning a salary that’s 40 to 50 times the monthly rent), it’s not uncommon for renters to seek assistance so they can qualify for an apartment. Enter “the guarantor.” Read on to get your guarantor questions answered.
What exactly is a guarantor?
A guarantor is someone who cosigns a lease and guarantees that the tenant will pay the rent on time and in full each month. If the tenant doesn’t pay the rent, it’s the guarantor’s responsibility to keep payments up to date.
Can anyone be a guarantor?
A guarantor is usually a parent or close relative, but they must earn 80, and depending on the building, as much as 100 times the monthly rent. For example, if the monthly rent is $2,500, a guarantor must earn a minimum of $200,000 to qualify as a guarantor on the lease. Some landlords require that a guarantor lives in the tri-state area too.
What is the guarantor responsible for?
The guarantor is responsible for paying the full rent through the end of the lease. If there are several people sharing an apartment and a guarantor signed to guarantee one tenant’s rent, and another tenant can’t make his share of the rent, the guarantor is responsible for covering the other tenant’s share of the rent too. For this reason, someone who’s considering becoming a guarantor should carefully evaluate the situation before deciding to sign on the dotted line. It’s best to know the credit history of the people on the lease before getting involved as a guarantor. Guaranteeing a lease is a substantial financial commitment.
What does a guarantor have to provide to be approved?
The guarantor will need the same documents as the renter, which includes proof of employment, income tax returns, bank statements, and personal references.
If someone signs on to be a guarantor, will the landlord contact him if the rent is late?
One would think that the landlord would want to be paid as soon as possible and reach out to the guarantor, but that doesn’t always happen. Often the landlord does the opposite and ignores the issue, so the situation escalates, and the rent goes unpaid for months. It’s best for a guarantor to set the guidelines early on, establish a relationship with the landlord and open the lines of communication. A guarantor should ask the landlord to contact him if the rent is more than a certain amount of days late. Otherwise, $2,500 could turn into $25,000.
Besides family or a close friend, is there anyone else who can be a guarantor?
There are companies who will guarantee rent for a percentage of the rent, but only if the renter has excellent credit. Insurent Lease Guaranty requires that a renter’s or combined renters’ annual income be 27.5 times the rent, or that the tenant or tenants have 50 times the rent in a savings account.