application materials<\/a>, we recommend acquiring the same materials from your guarantor. This can include a government-issued ID, bank statements, and tax returns from the past two years.<\/p>\nSome renters may not have someone they can personally ask to be their guarantor. In this case, they can look toward online companies that provide guarantor services. Remember, though, that these companies will charge a fee for their services, usually around one month\u2019s rent.<\/p>\n
How Much Does a Guarantor Need to Make?<\/h3>\n Guarantors must adhere to more strict requirements than the tenant on a lease. In New York City, a guarantor\u2019s yearly salary must be at least 80x the monthly rent, and they usually need an exceptional credit score above 750. Some landlords may require that your guarantor live in the same state, on the same coast, or within a certain distance of the apartment. The property owner wants to ensure they receive the rent payment if the tenant can not pay.<\/p>\n
What is a Co-Signer?<\/h2>\n A co-signer is similar to a guarantor in that they provide additional financial security for the landlord when the tenant does not meet the requirements on their own. A co-signer will sign the lease with the tenant and then accept responsibility for monthly payments with the tenant. The co-signer typically lives with the tenant in the unit and can be a parent, friend, or other roommate, making them an additional tenant.<\/p>\n
The co-signer is also responsible for paying the monthly rent. If the original tenant does not pay their share, the co-signer will have to settle the outstanding balance with the landlord.<\/p>\n
Apartment Co-Signer Requirements<\/h3>\n The co-signer does not have to adhere to the strict regulations that guarantors face, but like the original tenant, they must meet the apartment\u2019s income and credit requirements. Most landlords in New York City will accept a combined income that is 40x the rent as long as both renters have credit scores above 650.<\/p>\n
Is A Guarantor a Co-Signer?<\/h3>\n A guarantor is not a co-signer because they will not live in the unit with the tenant. They also will not pay the monthly rent and instead serve as a backup if the tenant defaults on their rent payments. You can not have the guarantor rent the apartment on their own, as they are an extra step of protection to the prospective tenant.<\/p>\n
Should I use a Guarantor or a Co-Signer?<\/h2>\n he biggest difference between a guarantor and a co-signer is where they reside, and your decision to use a guarantor or a co-signer mostly comes down to if you are willing to live with roommates. When you live in a city with people you know who are in a similar financial situation, it may make sense for everyone to come together on one lease. Additionally, using a co-signer can be beneficial if you do not have a guarantor who is willing to accept responsibility for your rental agreement.<\/p>\n
If you\u2019re adamant on living independently and do not meet the rental requirements, you will need a guarantor. Additionally, some groups of roommates may still need a guarantor if they do not collectively meet the rental requirements. New renters without a previous rental history may also need a guarantor, as some landlords may be cautious about adding someone to a lease who has not made large monthly payments before.<\/p>\n
What are the Risks of Being a Guarantor or a Co-Signer?<\/h2>\n Guarantors and co-signers each accept financial responsibility for the rent payment when they agree to their respective positions. When the initial tenant does not pay their rent, the landlord can fall back on the guarantor to cover the payment. The property owner can also default to the co-signer and ask for the original tenant\u2019s portion of the rent.<\/p>\n
When a tenant does not pay their rent, both guarantors and co-signers have a stake in the game if they cannot cover the additional payment. If the co-signer can not cover the additional rent, both tenants face eviction from the property. If the guarantor can not cover the rent, the landlord could come after them for collateral.<\/p>\n
Conclusion<\/h2>\n Guarantors and co-signers play a crucial role in the lease-signing process when a tenant does not qualify for an apartment independently. In either case, the guarantor and co-signer will sign the lease or an additional agreement that outlines their responsibility to the landlord. It\u2019s important for tenants to trust their guarantors and co-signers and vice versa. If either party has to financially cover for the initial tenant, that can complicate their relationship and lead to a difficult conversation between parties. Therefore, before anyone signs the paperwork, all parties should discuss the likelihood of the tenant not paying their rent and what will happen if the other party needs to cover the payment.<\/p>\n
<\/h2>\n","protected":false},"excerpt":{"rendered":" When you move into an apartment, you must pass certain financial requirements to show the property owner that you\u2019ll pay your rent on time. In New York City, renters must have a yearly income of 40x their rent and a credit score over 650. However, not all renters will meet these requirements on their own, […]<\/p>\n","protected":false},"author":3,"featured_media":15180,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"yes","_lmt_disable":"no","footnotes":""},"categories":[440],"tags":[],"class_list":{"0":"post-15178","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-rental-glossary"},"yoast_head":"\n
Guarantor Vs. Cosigner: What You Need To Know - Real Estate Topics, Tips, and Guides<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n \n \n\t \n\t \n\t \n