Finding a co-signer for an apartment lease is necessary if you don’t meet the financial requirements.
Renting an apartment is a major financial undertaking, one that you may not be able to take on by yourself. You may need a co-signer to join you on the apartment lease so you’ll get approved. It probably isn’t your ideal way to get the apartment you want, but it may be the one thing you need.
What is a co-signer?
A co-signer is someone who signs the apartment lease with you, taking on the same financial responsibility for paying the rent as agreed. The co-signer also takes on legal responsibility outlined in the lease agreement for taking care of and maintaining the apartment, even if they don’t actually live in the apartment.
For instance, if you hit the wall and it results in a large hole needing repair and you refuse to pay for those repairs, your co-signer could be on the hook for that bill. Likewise, if you default on your apartment lease by moving out early without paying the remaining rent due, as well as early departure fees, your landlord has the right to seek those monies from your co-signer.
Why would you need a co-signer?
There are numerous reasons why you might need a co-signer. A primary reason is your landlord may not think you have sufficient income to cover the rent, and they want to ensure you’ll pay your rent. Or, if you have a low credit score, previous bankruptcy or a history of late payments, your landlord may want some reassurance that they’ll get rent on time.
If you’re a college student or a recent college grad, your landlord may ask for a co-signer because you don’t have sufficient income or established job history. Another possible reason for a co-signer is if you’ve been evicted from an apartment in the past. Your landlord may be hesitant to take a risk on you without the security a co-signer could provide.
Who should I ask to be a co-signer?
Becoming a co-signer is both a financial and legal risk for the person who agrees to do it. Therefore, it’s important to find a co-signer who knows those risks and will step up and take responsibility.
In addition, you need to find someone with the financial resources to cover the rent in the event you aren’t able to. Your landlord will put them through the same qualification assessments — credit check, income and employment verification, background check, etc. — you undergo, so it’s important to find someone who will meet those requirements.
Also, you need to find a co-signer who will not walk away should you experience financial difficulty. Choose someone you trust to be there if you need them. That person also shouldn’t harbor hard feelings against you if you were to need their help. Family members or close friends are a good starting point for finding a co-signer.
How to find a co-signer
Knowing who to ask to be a co-signer is a good starting point. Once you know who you want to approach, there are certain steps you should take when asking them to co-sign your apartment lease.
1: Explain why your landlord wants you to have a co-signer
Tell your potential co-signer the reasons your landlord gave for having a co-signer. Is he looking for a sufficient income to cover the rent? Is your credit history bad? Is it because you’re a new renter?
2: Be clear about the financial obligations
Spell out what the financial terms are in the lease. How much is the monthly rent? How much is the security deposit? How much are late fees? Is there an early termination penalty if you break the lease? If so, how much?
It’s important any potential co-signer understands how much they would need to pay if you’re unable to uphold the terms of the lease agreement.
3: Make sure the co-signer understands the risks
If you’re unable to pay your rent, your landlord will report any late or missed payments to the credit reporting bureaus, where it will show up on your credit report and affect your credit score. But you won’t be alone. Your landlord will do the same for your co-signer, so his credit report and score will also take a negative hit. This could affect their ability to get approved for future loans, credit cards or mortgages, something they may not be ready to risk.
Alternatives to a co-signer
If you cannot find a co-signer, all is not lost. There are some options available to you.
- Get a roommate: Although you may have planned on having an apartment all your own, you may have to find a roommate who can share the lease — and rent —with you. It may be a short-term fix until you can increase your income, improve your credit history or build a steady work history.
- Enlist a co-signer service: These third-party services will guarantee your rent for a fee. However, it’s possible your landlord may not accept these services as your co-signer.
- Provide references: Give your landlord a list of people who can vouch for your fiscal health and sense of responsibility. Talking with them may reassure your landlord that you’re taking the apartment lease seriously and are prepared to uphold your financial responsibility.
- Look for a private landlord: While many apartment communities use property management companies that require all tenants to undergo stringent financial vetting, renting an apartment from a private landlord may be more lenient. Think of someone looking to rent a basement or garage apartment, a tiny home in the backyard or a duplex owner renting out the second half of the building.
These options may not be ideal, but they may provide a pathway to renting your apartment.
Now that you know what a co-signer is and how to find one, you’re ready to find your apartment. Start searching for apartments for rent, and you’ll be moving in before you know it.