what is a guarantor

A lease guarantor is someone who guarantees payment on the lease, in the event that you can't pay it. 

Your guarantor must:

• have very good credit.

• have an annual income of at least eighty times your monthly rent.

Why do I need a guarantor?

Apartment rentals are expensive, and good ones are scarce. Landlords and leasing agencies don’t want to waste time on potential renters who are considered “financially questionable.” They want proof of cash flow before they’ll rent to you. If the apartment you want to rent costs $3,000/month, you would need to make a salary of $120,000 (3000 x 40 = 120,000). Lastly, if you have any of the below, you will most likely need a guarantor:

• No credit history or poor credit

• Lack employment or rental history

• Newly graduated from college

• Non-resident in the U.S. to work or study

How do I find a guarantor?

Luckily, there are two ways to secure a guarantor.

One way is the old-fashioned way – your parents or other loved-ones. Friends and other family members can also act as your guarantor. Remember, it is important to get their approval before you start the rental process. Once you find an apartment you want to rent, they will need to sign paperwork, produce pay stubs and other financial documents such a tax returns.

The other option for securing a guarantor is to pay for one. Private equity and insurance firms have sprung up to fill this growing need of providing guarantees for renters who do not qualify for lease terms without backup. Regardless of whether you ask your loved-ones to be your guarantor, or you pay a private company to play that role, act fast and act before you find your dream apartment. Preparation is key!