How to get around needing a co signer for an apartment

Landlords typically consider your credit score, work history, income and rental history when deciding whether to rent to you. In the event that you do not meet his rental criteria, a landlord may agree to rent to you anyway provided that you obtain a co-signer. Your co-signer will have to sign a lease with you and agree to take on joint financial responsibility for the rental.

Consider Other Options

1. Decide whether the apartment you applied for is right for you. The fact that one landlord requires a co-signer to rent to you doesn't necessarily mean they all will. If you think finding someone to co-sign for you will be difficult, shop around a bit more. Some landlords might accept your application if you have proof of suitable income and a steady job, even if your credit score is on the low side. Other landlords might weigh a positive rental history more heavily than your credit score. Many private landlords are more lenient than professional real estate agents and corporate owners/managers. In addition, some landlords accept larger security deposits in lieu of a co-signer. Be sure to get all of the information you need from the landlord so you can let your potential co-signer know what's required of her.

List of Candidates

1. Make a list of the people who might be willing to co-sign for you. These likely include close family members and friends. The people on this list should have steady jobs, a decent income and an excellent credit score. They should also be people you feel comfortable asking for help. Ideally, the individuals on your list should know your financial situation and trust you. Most individuals will only consider co-signing for you if they believe you have the ability to pay your rent and a commitment to doing so.

Ask for Help

1. After narrowing your list to the best candidate, ask him if he's willing to co-sign the lease for you. Be candid about why you need a co-signer. For instance, if your credit score suffered because you lost your job, but you now have a steady job and money in savings, share this information. Likewise, if you haven't used credit in the past and need a co-signer because you don't have a significant credit history, let the potential co-signer know. It is important to be upfront about your situation and let the co-signer know what his risk is should you fail to pay your rent.

Complete the Process

1. Have your co-signer fill out a rental application and submit to a credit check. To co-sign for you, he will have to complete the application process and demonstrate that he is creditworthy. If he passes the rental application and credit check, he will need to sign the lease agreement as your co-signer. He won't have the right to live in your apartment, but he will have the responsibility of paying if you default.

It seems that money can buy almost anything these days, and one such thing available for struggling renters to purchase is an apartment lease cosigner.

A cosigner service provides consumers who otherwise cannot qualify to rent an apartment or home with a guarantee of rent payment to the landlord. While it is an interesting and intriguing concept, it’s also important to fully understand how cosigner services work so you can weigh the various pros and cons. Be sure to learn more about the background information – including risks and costs – before jumping in.

Who Can Benefit From a Cosigning Service

Whether you qualify as a renter for an apartment or home depends on several personal financial factors. Your credit score is the major contributing factor: If you have a low credit score because you have a poor credit history (or if you don’t have much of a credit history at all), a cosigning service can make the difference between being able to rent a place or being denied.

Another primary contributing factor is your rental or home ownership history. Those who are just starting out and don’t have a significant rental history can also benefit from a cosigning service.

How It Works

In essence, a cosigner service acts as a lease guarantee program. This means that if you default on your rent payments, the cosigner service guarantees your landlord, management company, or apartment complex that your rent will be paid for a certain period of time.

1. Submit an Application and Application Fee
The first step to buying a cosigner is to submit an application. You can submit an application whether you’ve already been told that you cannot qualify for a rental on your own or prior to finding the apartment or home you wish to rent. Along with the application, cosigner services generally charge an application fee, which may range between $50 and $125.

2. Receive Approval
Once you receive approval of your application, you can start your hunt for a place to live. You receive a certificate from the cosigner service that tells the apartment complex or landlord how much of your rental amount the cosigning service guarantees.

3. Rent a Place to Live
Search for your home just as you would without a cosigner, and when you submit the rental application, submit the cosigning certificate with it. If you already found the place you wish to rent, submit the certificate to the landlord or management company for verification of your cosigning arrangement. Sign the lease, and your cosigning service guarantees the lease as your cosigner.

4. Pay Rent
You must pay the monthly rent payment to the landlord, management company, or complex.

5. Pay the Cosigning Company the Cosigning Fee
Cosigning services charge in different ways and at different frequencies. Some charge a percentage of the rent as a one-time, upfront payment that you make to them, such as 10% of the annual rent amount. Other cosigning services spread the payments out on a monthly basis, so you eventually pay 75% to 110% of the monthly rent payment.

Risks

While a cosigning service can help you rent a place to live, using this type of service has its own set of disadvantages.

1. It Can Be Very Expensive
In addition to the monthly rental fee, you must typically add anywhere from 6% to 10% of your rental amount to your expenses. Depending on your rent payments, this can add up to a significant amount of cash and make it difficult to afford your rent payments.

2. Cosigning Companies Don’t Guarantee the Entire Lease Term
Some cosigning services only guarantee the rent payment for 90 to 180 days, and some landlords may be turned off by the fact that your cosigner is only guaranteeing 3 to 6 months of a 12-month lease.

3. Upfront Fees Are Nonrefundable
If for whatever reason you do not qualify for the cosigning service, then the upfront application fees are lost. However, some of the fees may be refundable if you are unable to find a landlord willing to rent to you after being approved by the cosigner service. For example, certain service companies may refund the application fee in this instance, while others will not.

Service Companies

While there are a number of cosigner services popping up on the Internet, three of the most popular cosigning services are:

1. Co-Signer.com. This company guarantees a rental lease for 90 to 180 days. Initial fees to the consumer include a $50 processing fee and a $75 fee to cover a credit and background check. Once the consumer agrees to use the services of Co-Signer.com, the cosigning fee is due upfront and in full. For a 90-day guarantee, the fee is 6% of the annual rental payment, and for a 180-day guarantee, the fee is 10% of the annual rent payment. For example, if the monthly rent payment is $2,000, then an annual rent payment is $24,000. The fee for a 90-day guarantee would be $1,440, and $2,400 for a 180-day guarantee.
2. WECOSIGN. This service charges a $100 upfront application fee that is refunded to the applicant if the consumer is unable to sign a lease. This service also spreads out the cosigning fee into 12 equal payments for a 12-month lease guarantee. The cosigning fee is 10% of the monthly rent. For example, if the rent is $2,000 per month, then the cosigning fee is $200 per month. For high-risk consumers, WECOSIGN can ask for the cosigning fee totaling six months’ worth of payments upfront. Using the same $2,000 per month rent, this equals an upfront fee of $1,200.
3. Insurent Lease Guarantor Service. Insurent charges one lump sum that equals an upfront payment of 75% to 95% of one month’s rent for a 12-month lease guarantee. This particular service does not charge an application fee; however, if the applicant is not a U.S. resident, the service fee is 110% of the monthly rental amount. Therefore, if the monthly rent is $2,000, Insurent’s one-time fee ranges from $1,500 to $2,200.

Final Word

Everyone needs a little help sometimes, and if your credit history, or lack thereof, prohibits you from renting a place to live, then a cosigning service is one option to consider. While it may be expensive, hiring a service to act as your cosigner relieves you of having to ask friends or family members for money, allowing you to rent the place of your dreams on your own.

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