What is a Guarantor for an Apartment?
Finding the perfect apartment to rent or rent is an exciting feeling. But before you can start decorating the place, you will need to go through an application process. One of the main things a landlord or property manager looks for in a tenant is whether they can afford to pay the rent or lease on time. Additionally, if you are a first-time renter with no rental history, bad credit, or limited work history, you may need a guarantor to find an apartment.
What is a guarantor for a lease?
Sometimes referred to as a co-signer, a guarantor is someone who legally assumes responsibility for paying the rent in case something fails you. The guarantor of your apartment must be financially stable, have good credit and agree to make a financial commitment to make the monthly payments for you. If you are renting an apartment, you will need a guarantor for the lease who is willing to assume the terms and timing of the rental agreement.
When using a guarantor, it is important that all parties understand the terms of the rental or lease agreement before signing. For example, if you decide to sublet your apartment and you can do so under the agreement, the guarantor is still responsible for the payment even if they signed the agreement for you, not the new tenant. . Communication for all aspects of the rental or lease process is vital for you, the landlord and guarantor to feel comfortable with the contract.
When should I look for a guarantor?
I hope you don’t need a guarantor for your apartment. If all of your paperwork is in order, you can show job stability, proof of income, and a good credit rating the landlord can find you are the perfect fit for the apartment. However, if you meet any of the following conditions, the landlord may want you to have a guarantor:
- Lack of rental history: Landlords like to see you’ve already rented to see if you’ve made the payments on time and taken care of the property. If you don’t have a rental history, consider a guarantor.
- Previous eviction: As a tenant, you can be evicted for several reasons. Failure to pay, late payments, or breach of rental or lease contract terms are often grounds for eviction.
- Bad credit: If the landlord examines your credit history and finds a low score, it could give them a wake-up call. Typically, a low credit score means you haven’t made payments to your creditors on time, and landlords should check that you can commit to paying rent on time.
- No credit history: A landlord can’t verify that you can make a payment on time if you don’t have a credit history.
- Insufficient income: In general, you should have sufficient monthly or annual income to cover rent, utilities, food, and insurance. Normally, you should loosely follow the 30% rule.
How to find a guarantor?
Keep in mind that a guarantor signs and takes financial responsibility for paying your rent if the situation arises where you cannot. It’s a big responsibility, and you want to make sure whoever becomes your guarantor understands the commitment. The first place to look for a surety is with family or friends who are not afraid to cover you. It’s important not to jeopardize your relationship with the guarantor in the event of a missed payment, so make sure everyone understands their responsibility.
What should I do if my family will not be my surety?
You may not be able to find a suitable candidate to take on the role of your referee. Maybe the person you are asking is not comfortable taking on the role or does not have the necessary qualifications that the owner is looking for. One option for finding a guarantor is to hire a company that provides a guarantor service.
There is a charge for a surety service, which is understandable, as they are the ones who take the financial responsibility if you can’t pay your rent. It’s important to understand the guarantor’s fee structure before committing to it, especially if you’re a little strapped for cash. Here is how it works:
- Guarantor fees are usually based on applicants’ credit scores, so if yours is low, expect to pay a higher percentage rate than if the score was higher. Typically, a tenant using a guarantor will pay between 4% and 10% of the annual rental cost.
- For example, if your annual rent is $ 1,800 per month, that cost rises to $ 21,600 over a 12-month period. Let’s say you get a 5% rate for the service, then you have to come up with $ 1,108 and pay that up front before the guarantor signs the rental agreement or lease.
If the associated fees are acceptable to you and the use of a guarantor service sign can get you the apartment of your dreams, then renting the service is a good choice for you.
What if I cannot find or afford a surety?
If you can’t find a suitable guarantor or aren’t comfortable with a service, you have other options.
- Find an apartment that best fits your budget.
- Speak with your landlord. If your credit score is low due to medical bills and you can afford the monthly rent, the landlord may ignore the low score and rent the apartment to you. Some owners will accept additional move-in fees such as a higher security deposit or several months of payment in advance.
If you find yourself in a situation where you really want a certain apartment and need help getting it, a surety is a good option, whether it’s a paid service or someone you trust. in your life.
Ready to find your perfect apartment and start the application process? Search thousands of apartments for rent on Zumper and find out if a guarantor is right for you.