When you're trying to secure a lease for an apartment, you may be asked to provide financial guarantees that give the landlord reassurance that you can pay your rent. Two common types of guarantees are guarantors and cosigners. While the terms are often used interchangeably, there are some fundamental differences between the two options. In this post, we'll look at what you need to know about guarantors and cosigners and help you decide which option is right for you.
A guarantor is someone who agrees to pay your rent if you're unable to do so. They usually need to provide the same information as you would in the rental application, such as proof of income, credit score, and rental history. The guarantor signs a separate agreement to guarantee your lease, which typically lasts for the same period as your lease. Landlords usually prefer guarantors who have a stable income and a good credit score.
A cosigner, on the other hand, is someone who signs the lease with you and agrees to be equally responsible for paying the rent. The landlord can hold either you or the cosigner liable for the full rent amount if it remains unpaid. Unlike a guarantor, a cosigner is a joint tenant and is just as responsible for the apartment as the tenant they're aiding.
When it comes to choosing between a guarantor or cosigner, it depends on your circumstances. If you have a blemished credit history or can't provide enough proof of income, a guarantor can be an excellent option to secure a lease. However, if you're willing to share the lease, have a good relationship with another person willing to act as your second party, then a cosigner may be a better choice. Cosigners are also beneficial if you want to build your credit score by having someone cosign that has a good credit history.
Each option has its pros and cons, and it's crucial to know them before committing to either option. For example, with a guarantor, you'll have someone to fall back on if you can't afford to pay rent, but you'll rely on them financially, which could put a strain on the relationship if you default. A cosigner, on the other hand, takes the risk of paying for a rental property that they may not live in. As a result, they put their credit score on the line to ensure the rent is paid.
While you may not need a guarantor or cosigner to rent an apartment, it's good to know that you have options available. Carefully consider both guarantors and cosigners, taking into account your financial situation, credit history, and personal relationships. Choose the option that's best for you and your needs. Remember, if you have questions along the way, contact a trusted member of your community, like your landlord or management office in Wilson, NC. They will be happy to help you through this process.