Why Do You Need a Guarantor?
You may need a guarantor if you are applying for an apartment but do not meet the requirements on your own. Some reasons you might not meet the requirements to rent an apartment alone include:
1. If you have a limited rental history.
2. If you have a low income.
3. If you have serious delays on your credit reports.
Responsibilities of the Guarantor
Guarantors of the apartment share responsibility for paying the monthly rent equally. This means that if you are unable to cover the rent for the current month, the person who is guaranteeing the apartment with you will still be responsible for paying the full rent for the month. Guarantors are often also responsible for any other debts incurred by the tenant, such as late fees or damages to the rental unit. You could face eviction if any of the agreed payments in the lease are not met.
Should it be a Guarantor or a Co-Signer?
There are generally two ways someone can help you qualify for a lease: by being a guarantor or a co-signer. A guarantor is jointly responsible with you for paying the monthly rent and may have their name listed on the lease as a tenant. A co-signer is only responsible for paying the remaining rent if the primary tenant fails to pay. The co-signer will not be listed on the lease, will not live in the rental unit, and will have no rights to the property. Essentially, a co-signer is a backup plan for the landlord to receive payments.
Who Should Be My Guarantor?
You may have already thought of several people who might be willing to be your guarantors. The guarantor and tenant could be a sibling, friend, or close partner. Here are some considerations when choosing a guarantor:
– Will the guarantor be a roommate, or do you just need help getting approved?
– If the guarantor will also be a roommate, do you trust them to help with bills and rent payments? Is this someone you feel comfortable with?
– Is the person willing to make payments on your behalf if you cannot pay?
– Will issues related to the lease affect your relationship with the guarantor?
– Is this person financially responsible?
– Is this person old enough to have an established credit history?
Alternatives to Having a Guarantor
If you cannot find a guarantor, you still have some options. In some cases, the landlord might be willing to approve your rental application if you can pay a larger security deposit or pay rent upfront. By making a significant financial commitment upfront, the landlord may feel that taking you as a tenant is less risky than initially thought.
Additionally, you can look for apartments from individual owners who do not conduct credit checks, but you will need to meet income requirements. Finally, depending on the time you have, you may be able to work on improving your credit or increasing your income until you qualify for an apartment without a guarantor.
Frequently Asked Questions (FAQs)
How can I find a guarantor for an apartment?
A guarantor for an apartment can be someone you know who agrees to pledge to pay in case you are unable to make the payment. This could be your parents, a relative, a friend, or a partner. If none of these options are available, some apartments may allow you to use a guaranty company that charges a fee to sign the lease with you, such as Leap Easy.
Does having a guarantor affect your credit?
Usually, guarantors do not affect your credit. However, if they have to step in and make payments due to your default, it could potentially impact their credit. Make sure to communicate openly with your guarantor about your responsibilities and financial situation to avoid any complications.
Some landlords check your credit if you are acting as a guarantor for someone else in a lease agreement. These inquiries can affect your credit, even if you did not apply or sign the lease. If the relationship ends with an amount due that goes unpaid due to eviction or unpaid damages, the amount may be sent to a collections agency that can report the outstanding amount to credit bureaus.
Can parents be co-signers for buying a house?
Parents can be a viable option to sign a home purchase agreement if you are renting it. The landlord or property management company may have specific requirements for co-signers, including income, employment history, and rental or mortgage history.
Source: https://www.thebalancemoney.com/why-do-you-need-a-co-signer-for-an-apartment-5198195
Leave a Reply