Once you have your sights set on your next apartment, getting through the approval process can be nerve-racking. If you find yourself in a position where you do not meet the qualifications for approval, you’re not out of options. Using a cosigner or a guarantor is an easy way to qualify for a lease and push your application status to approved. We’ll break down what is a cosigner for an apartment and what is a guarantor, and how to navigate the process of applying with each.
Why would you need a guarantor or cosigner?
There are several reasons you might get turned down for a rental. It could be that your income is a tad below the level desired by your potential landlord or that your credit score might be too low or nonexistent. Before approving an application, landlords want to know that someone will pay the rent. That’s where a guarantor or cosigner comes in. Both can help you obtain a lease if you’re financially unable to qualify on your own. They each have different rights and responsibilities, so it’s important to know the difference before choosing one.
A guarantor is an outside party, like a family member or friend, who will vouch for you and agree to take responsibility for the rent if you’re ever unable to pay it. A guarantor assumes all the legal responsibility of the apartment but doesn’t have any rights when it comes to the property. For instance, if a parent is a guarantor for their child, the parent doesn’t have the right to occupy the rental property. Also, if their child has roommates, and the roommates don’t pay, the guarantor is on the hook for all of the rent, not just their child’s portion.
What’s a cosigner?
In the eyes of your landlord and the law, a cosigner for an apartment is just an additional renter. They bear the legal responsibility for the rent and can live in the property. In most cases, a co-signer is a roommate or a significant other who signs the lease and assumes responsibility for paying a portion of the apartment rent and fees. In some cases, this could also be a family member who is sharing the apartment.
Cosigner vs. guarantor
Despite these distinct differences, many rental markets will casually use these terms interchangeably. But, is a guarantor a co-signer? Not necessarily. In short, a cosigner for an apartment takes on a higher risk by signing on. Yes, the benefits are higher too, but they do come at a cost. If you’re a co-signer living in a shared property with roommates, the failure of anyone else to pay their share of rent and fees can fall to you. You can end up responsible for all of the rent in a property you have co-signed a lease for.
You can also risk the hazard of eviction if other renters don’t pay their fair share, despite the fact that you’ve already paid your portion of it. You can also be sued for the entire rental amount of the full lease term if you break your lease.
What are the rights and obligations of a guarantor? Firstly, a guarantor has no rights to the lease they are pledging to pay if you or anyone you live with fails to pay. They cannot move into the rental property and are usually required to live in the same country as the person they are serving as a guarantor. They may put up collateral as a surety. If anyone defaults on the lease, they could stand to lose anything they put up, from personal property to cash. A guarantor has a higher risk, as they have total financial responsibility without any rights to the property.
Tips to help you find a guarantor or cosigner for your apartment
Think it over
Before choosing a guarantor or cosigner for an apartment, think long and hard about the potential impact this could have on your relationship with the party who acts as co-signer or guarantor for you. Consider limiting the time period where you want to have the cosigner or guarantor help you out. Perhaps you have a multi-year lease; you may decide that you only wish them to be a cosigner or guarantor for the first year of your lease until you’re on your feet and can handle the financial obligations of your apartment rental.
Once you decide who you want to ask for help, consider how you will broach the subject with the person you choose. It helps to do it at a time when neither of you is rushed, stressed out, or short-tempered. Maybe consider going out to lunch or for coffee, and socialize prior to asking for their help.
Be prepared
When you present your request, you should already have prepared answers to some of the key questions your potential cosigner or guarantor may ask you, such as: How would you repay them if something went wrong? What would you do if they were forced to pay rent for you for any length of time?
Set their mind at ease from the start by having an idea of how you would go about handling a repayment to them if you slip on the rent due to a potential loss or reduction in income, the economy, health issues, a job change, or any other reason.
Understand the obligations
Both a cosigner and guarantor take on financial responsibility to help you get into your new apartment, but each has specific rights that go along with that responsibility under the law. Knowing the difference can help you decide which works best for your situation.
Handling these issues before making the decision to enter an agreement is the key to a good relationship with your family member or friend taking on this responsibility. Take time to think of who you want to ask for help, be prepared, and choose wisely.
Ready to start your search? Find thousands of apartments for rent on Zumper and remember to choose a guarantor or co-signer you trust.