After finally finding that perfect NYC apartment, it’s time to prove you can actually pay for it. Many NYC newbies and even natives can’t meet landlords’ strict criteria, like having a high credit score or a salary that equals 40-45 times the monthly rent, for example. Which is where guarantors come in–a co-signer who guarantees payment on the lease if it otherwise can’t be made. But this is an entirely additional process, from finding someone who fits the bill to gathering all of the necessary paperwork. To make the process simpler, 6sqft has put together a guide of everything you need to know about using guarantor and some tricks of the trade.
For NYC renters who don’t have a parent or well-to-do friend who can guarantor their apartment, getting on a lease can be a challenge. In addition to wanting a credit score of at least 700 and looking at bank statements, landlords usually want to see that a prospective tenant’s annual income is 40 times greater than one month’s rent. If that’s not the case, their guarantor must earn a whopping 80 times the monthly rent. Aware of this hardship in a country where rents have risen 20 percent over the last five years, a new financial startup hopes to help clear these hurdles. As noted by the Wall Street Journal, TheGuarantors sells payment insurance to tenants, which gives landlords a guarantee that they’ll still be paid if the tenant fails to meet rent.