How To Know If You Need A Co-Signer For Your Apartment Lease
Are you thinking about moving to a new place? Well, then you've probably come across the term "co-signer." TheGuarantors says that a co-signer is a person who guarantees your financial liability to the landlord by signing the lease with you. They explain that a co-signer generally has a good credit score and a substantial income, noting that they will be responsible for payments along with the prospective tenant.
While not everyone will need someone to co-sign on their lease, there's a range of different instances when you might need one. We've compiled a list of scenarios where you would have to consider getting someone to co-sign before you sign your lease. In most cases, your landlord will likely ask you upfront, but it's always better to stay in the know. So read on to find out if you need one, who you can ask, and a few other pointers to keep in mind.
When do you need a co-signer?
As The Balance explains, if you've applied for an apartment and didn't meet the requirements, chances are you will need to get someone to co-sign for you. Most landlords will often require one if you don't have a rental history or have limited income. They note that, typically, the total amount of a tenant's annual rent should not exceed 30% of their gross income. Also, if your credit report isn't looking too good, that's another scenario where you will need a third party to co-sign on your behalf.
However, according to Investopedia, there are alternatives to finding a co-signer if you're interested. For example, they recommend looking for opportunities such as subleasing or entering a roommate living situation. There's also the option to get a company to do it as some services provide co-signer services for a fee, but you need to apply for them. If you're authorized, you will receive a certificate you can submit to your landlord, commonly known as a co-signing certificate.
How do you find a co-signer?
Now that you understand the basics of why and when you need a co-signer, let's look at who you can ask and how you can find someone to co-sign on your behalf. As Rent explains, your co-signer needs to fully understand the responsibility of signing on behalf of someone for a lease.
They should also ideally be able to afford to pay on your behalf in case the situation calls for it. Your landlord will run them through the same credit, income, employment, and background checks as you, the prospective tenant, so make sure you pick someone who qualifies. Find a co-signer who won't bail if you have financial trouble. Choose someone you can rely on. If you need support, that individual shouldn't hold grudges. On that note, family or close friends are ideal co-signers.
It's also important to remember that asking someone to co-sign comes with a set of drawbacks. For instance, Apartments.com that it has the potential to cause some tension in your relationship if you ask a close friend or family member to do this for you. Also, although having a co-signer is great for your application, some landlords may reject your request altogether and offer it to someone who doesn't need someone to sign on their behalf.