for smart Renters
What is a guarantor?
Step 2: Figure Out If You Need a Guarantor
A guarantor is someone who guarantees to pay your rent if you fail to do so. The landlord will require a guarantor if your income is below the “times rule” (in Manhattan, salary = 40 times the monthly rent; outside of Manhattan, salary = 25 or 30 times the rent), if your credit history is not very good, if you just started a new job or if you’re a student.
The guarantor must meet high financial standards since he/she must support his/her own household as well as your household if you fail to pay the rent. Landlords usually require that a guarantor should have a good credit history and an income at least 75 times the monthly rent.
If you have a roommate, the guarantor arrangement can be complicated. Each roommate who signs a lease is legally contracting to pay the full rent on his/her own, regardless of any personal agreements reached between the roommates. The landlord expects to receive the full rent each month and will not accept a partial payment merely because one roommate failed to pay his/her share. In the event of a shortfall in the rent payment, the guarantor of the lease is legally required to pay the full rent regardless of which roommate failed to pay.
For example: Sue and Maria are roommates and they both signed the lease. Sue is a student who has no income, and Maria has a job where she can cover her half of the rent but doesn’t make enough to cover the full rent. Sue’s parents have agreed to guarantee the rent by signing the lease as guarantors. Three months after the girls move in, Maria loses her job and has to move back home. Sue’s parents are now legally obligated to pay Maria’s half of the rent until the end of the lease or until Sue finds another roommate.
Remember: the guarantor is guaranteeing payment of 100% of the total rent, not a portion of it. The parents of roommates who need guarantors must talk to each other and make sure everyone understands the responsibilities of each guarantor.
TIP: Guarantors will be screened by the landlord during the application approval process. The guarantor needs to have good to excellent credit.
Guarantors often feel that the landlord is demanding too much information of a very personal nature. As such, guarantors often only put down on the application as much income as they think the landlord needs to see, not what they really earn. That is a mistake.
Guarantors should answer all the landlord’s application questions openly and honestly, even though the financial inquiries may seem intrusive and even though it may be uncomfortable to disclose financial data.
The information disclosed is treated with all respect to privacy and security. Information is never shared with state or federal tax authorities, nor with any other governmental agency. Landlords simply want to know that the guarantor can handle the extra financial burden in the event of a default.
TIP: Parents of roommates should talk to each other and come to a private agreement about their financial obligations to each other in the event of their child’s default. The roommates should also have an agreement between them about paying the rent and finding a replacement roommate in the event of a default.
Insurent Lease Guaranty Helps More International Students Than Ever to Get the NYC Apartment They Want in Tough Rental Market
The Insurent® Lease Guaranty Program was created to assist landlords, condo/co-op owners, renters and brokers in closing residential leases. Insurent allows thousands of leases to quickly and easily close to the benefit of all parties.
The 2012 NYC rental season will be the most difficult and competitive in the last five years says NYC guarantor service Insurent Lease Guaranty. The rental market in New York is on fire with rental prices at all time highs, turnover and vacancies at low levels leaving fewer apartments for the increased number of people who prefer to rent rather than buy, even at high prices.
Then, how do foreign students get an apartment with no credit or income, little money, and parents who live in Asia, Europe, or South America who are not acceptable guarantors in the eyes of the landlord?
International students in New York City are now able to easily qualify for and secure the apartment they want. As a foreigner, they do not have US credit which is critical for landlords, and as students they do not work, and usually have very little money in their own name. No credit, no job, and not much money in the bank makes it exceedingly difficult to rent for international students. In the past, their only way to secure an apartment was to prepay the full year’s rent or to put up six months or more security.
Moreover, many rental buildings in Manhattan are not legally permitted to accept prepaid rent or extra security, so this is not an option in most cases even if the student had the resources to do so.
Many international students are now able to close on their apartment in less than 24 hours through the Insurent Lease Guaranty Program. The Insurent Lease Guaranty guarantees the lease and enables the landlord to accept the international student renter with no financial risk.
Charles Schoenau, Managing Director of Insurent, explains, “We have guaranteed hundreds of foreign students in the last year and the numbers continue to increase rapidly. We make it so much easier for the international students who may look for weeks unsuccessfully without us and waste unnecessary amounts of time and suffer from understandable frustration and anxiety. We want to get the word out how easy and fast it is to get it done with Insurent.”
All that is required of the student is a copy of their passport and visa, a copy of their parent’s passport and evidence that the parent’s annual income in their home country is a minimum of 50x the times the monthly rent or that the parent(s) have cash or marketable securities in their home country equal to a minimum of 80x the monthly rent.
By using Insurent, the student and their parents know that they can get the apartment that they want in short order.
Visit Insurent online: Insurent.com
There is also a new “guarantor” in town - Insurent.com. Insurent is a corporate guarantor that will guarantee your lease for you for a fee that is generally a little less than one month’s rent. Read the section below to see if Insurent is the right solution for you.