Lease guarantors and cosigners: What are they and why would you need one?

A guarantor is a person who will co-sign an apartment lease alongside a tenant, guaranteeing to pay the rent if the tenant fails to do so. The guarantor is usually a parent, family member, or close friend who is willing to be legally responsible for the rental apartment.

In the context of renting apartments, the terms guarantor and co-signer are sometimes used interchangeably. Both guarantors and co-signers are responsible for paying the rent if it goes unpaid by the tenants.

Oftentimes, there is a financial requirement to become a tenant. In New York City, landlords often require that the tenant have an income of 40 times the monthly rent. For many first-time renters and young professionals, especially those living in expensive cities like San Francisco, where the average rent for a studio apartment is about $2,300, this requirement is difficult or impossible to meet. If your income does not meet the requirement set by your landlord, you may ask a financially stable guarantor to co-sign your lease instead.

 Another reason you might need a guarantor is if you have little rental history or credit history, or a bad credit score. Recent graduates might not have had much time to build up credit, so landlords do not have proof of financial responsibility. Prospective tenants with bad credit may have a difficult time finding landlords willing to take on the risk, so a guarantor is a way to overcome this roadblock. 

The financial requirements for a guarantor are more extensive than those of a tenant. Typically, a guarantor must have an income of 80 to 100 times the monthly rent of the apartment they are offering to guarantee. In order to demonstrate that a guarantor meets the income requirement, they must submit the following documents and information.

• Pay stubs

• Tax returns

• Bank statements

• Social security number

Family members and close friends are the best options when choosing a guarantor. If you can’t find a guarantor you know personally, there are services designed to help. For example, Insurent is a company that will act as your guarantor on your lease agreement for a fee of about 80 percent of one month’s rent. In order to get approved for such a service, you must have good credit and meet a smaller income requirement than the one in place by your landlord. 

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