As a personal guarantor, how much does my kid’s NYC landlord really need to know about my finances?
- You can redact everything but the last four digits of your social security or bank account number
- You also don’t have to provide your full tax returns unless you’re self-employed or a freelancer
Being a guarantor is a lot more responsibility than helping to carry a few moving boxes.
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My adult child is moving to NYC after college, and asked me to be her guarantor. I’ve been surprised by the amount of information I’ve been asked to provide to a landlord as part of the application process—after all, I’m not the one moving in. As a personal guarantor, how much does a landlord really need to know about my personal finances?
It can feel uncomfortable, or downright invasive, to have to turn over your personal financial information to the landlord of an apartment you’re not even going to live in. But that’s the responsibility of a guarantor—someone who covers a tenant’s rent if they default on their monthly payments.
Brokers and landlords will usually ask you for the same information as your child to make sure you can pay rent on the apartment while balancing your own financial obligations, said Barbara Ann Rogers, a broker at Compass.
That paperwork usually includes last year’s tax return (plus a 1099 or W-2 form if you’re self-employed), a credit check, your last mortgage statement, and information about your investment accounts or other income, Rogers said.
Everything you submit during an application helps establish that you make 80 to 90 times the monthly rent, or enough to cover the entire bill. That’s because as a guarantor, you’re promising to cover all of the rent in the event of a default—not just your child’s share—plus you'll need to meet your own rent or mortgage payments, Rogers said.
But that doesn’t mean you have to give away all your financial information without taking any precautions. Read on for three ways you can limit the amount of information you share with a NYC broker or landlord.
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Redact your social security number
For a rental application, you might be asked to provide copies of your bank statements, which include your full bank account number, and your social security number. But you don’t need to leave in every digit—just the last four will suffice, said Rogers.
“What I always say to renters and guarantors is before they send me anything they can redact their social security number—everything but the last four digits—and the same thing with their bank account number,” Rogers said. “And if they do not do that, I do that anyway before I send that on to the landlord.”
Your broker will need your full social security number to run a credit check, but that should be done through a separate website—not over email or text communications.
“The only time the social is coming into play is for the credit background check,” Franklin said.
And if you’re worried about giving your social security number to multiple credit companies, you can always use your credit check from your last apartment application, as long as it was completed within the past 30 days, Rogers said.
“If somebody comes to me and applies for an apartment and goes through the credit check process that I have, I give them a copy of that report,” Rogers said. “They can take that report and go to the next place, and that place is required to accept that as long as it's 30 days old or under,” unless you’re renting in a condo or co-op, which can make its own rules.
Use your broker as a buffer
A broker can act as a wall between you and your child if you don’t want them to get a full picture of your finances—or vice versa, said Molly Franklin, an agent at Corcoran.
“Their child doesn’t have to see these documents. We can send them in a totally separate file,” Franklin said. “I’m not going to talk about these numbers with your kid.”
Maybe you can afford to be a guarantor, but don’t want your child to know that your finances aren’t picture perfect. Or maybe you don’t want your kid to request that you contribute to the rent. Either way, an agent shouldn’t share your personal information with your spawn.
“I owe them that privacy,” Franklin said. “I think that any agent that understands fiduciary responsibility is going to be very respectful here.”
Don’t share all of your tax returns
You also don’t have to provide your full tax returns, unless you’re self-employed or a freelancer, Rogers said.
“I generally only ask for the first two pages, unless they are freelance or have a Schedule C, in which case I would ask for the first two pages of the Schedule C,” Rogers said.
But it’s important not to be too intractable when it comes to sharing your financial details, Franklin said. You don’t want to ruin your child’s chances of securing an apartment.
“It is smart to be very cautious with your sensitive information these days, but it is also smart to not get in your own way while trying to secure housing in an inflexible market,” Franklin said. “You want to put your best foot forward.”
