First, you find the perfect apartment in New York. Next, you prove that you can actually afford to pay for it.
You probably know by now that landlords in New York require a good credit score (of at least 700) as well as a salary of 40 to 45 times the monthly rent.
If you have bad credit and less than 40 times the monthly rent, you are going to need a guarantor.
A guarantor is a co-signer who guarantees payment on the lease in case you are unable to do so. Again, the guarantor is liable to pay the rent if you are unable to.
When looking for a guarantor, you need someone who fits the bill.
First off, do you really need a guarantor?
Not all landlords are the same and they do vary in their requirements.
Some may require earnings of more than 60 times the monthly rent. Find out what the landlords require of you as his tenant.
If you do not meet the requirements, the landlord will most likely accept guarantors. Guarantors can be parents, uncles, aunts, or high-earning friends.
Finding a guarantor is challenging
Finding someone willing to be your guarantor is not that easy. The first people you turn to would be your family members, then your relatives.
Let them know how much competition there is for a New York City apartment, and that the landlord is no doubt sifting through hundreds of applications. Considering the strict requirements of landlords in New York City, there is no chance of you landing the apartment without a guarantor.
What you can do is draw up a contract with your guarantor, stating terms that will make it easier for them to co-sign the lease.
Who can be a guarantor?
Not anyone can be a guarantor. A guarantor needs to earn 80 to 100 times the monthly rent to qualify.
Your guarantor will need to submit documents such as:
- Payment stubs for the last 4 months
- Two bank statements
- Two years of tax returns
- Most recent bank statements
- Social security number, state ID, or passport
- Proof of liquid assets
- A Letter of employment or a statement from a public accountant if self-employed
If you are uncomfortable with finding out your guarantor’s sensitive financial and personal information, you can have them submit directly to the rental agency or the landlord.
Landlords for New York City apartments, usually only accept guarantors that live in New York or the Tri-state area. This way, the guarantor can sign an original copy of the lease.
Students, foreign workers, or those with a low-income usually turn to institutional guarantors. Institutional guarantors are financial institutions that are willing to accept the financial liability in case of a missed payment for a fee.
Once a guarantor signs on, he or she becomes responsible for any missed rental payment.
Can’t get anyone to be your guarantor? Here’s what you can do
If you cannot get anyone to be your co-guarantor, don’t fret. You still have options to land your New York City apartment.
One is to offer to pay for multiple months of rent up front. Although this is not a guarantee, some landlords yield and some don’t.
Another is to look for sublet apartments in New York City. With sublet apartments, you don’t have to sign any lease.
Lastly, you can enlist the services of companies like Insurent and TheGuarantors. For a fee (usually 5 to 10 percent of the annual rent), they will act as your guarantor granted that you meet qualifications. Qualifications usually include a credit score of at least 630 and an income of 27 times the monthly rent.
But if you don’t, you may be able to work out an agreement with them.
These companies have been assisting in helping apartment seekers in New York with their problem. They have been helping students, foreign workers, and low-income earners rent an apartment in New York.
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