Ewa Beach renters might be familiar with the words “cosigner” and “guarantor.” But what do they actually mean? What is the distinction between the two? We’ll outline the distinctions between cosigners and guarantors in this blog post, as well as offer advice on how to solicit assistance from friends or family.
What is a Cosigner?
A cosigner signs a lease with you and accepts the responsibility to be liable for the rent if you are unable to pay. A cosigner is regarded as another tenant, even if only on paper. A cosigner must first sign the lease with the tenant and then can legally occupy the rental property. This individual is also willing to share a tenant’s financial obligations, such as any potential fees, unpaid rent, or damaged property. In the majority of cases, a cosigner will have better credit than the renter and a significantly higher income, as they will need to display up to six times the amount of rent to qualify. A co-signer can make it much easier for a young or first-time renter to qualify for a rental home.
What is a Guarantor?
A guarantor, unlike a cosigner, assures that they will cover your rent only if you cannot. A guarantor is not regarded as a tenantand does not have the same privileges as a co-signer. A guarantor serves as a financial cushion should the tenant be unable to fulfill their financial obligations. Like a co-signer, a guarantor must demonstrate income that is at least six times the monthly rent.
An important distinction between a cosigner and a guarantor is that a cosigner is legally liable for the rental property, whereas a guarantor is only financially responsible. A guarantor assumes financial responsibility if the tenant fails to pay rent or repair property damage. A cosigner, on the other hand, is liable for the rent whether or not the tenant does.
Why You Might Need a Cosigner or Guarantor
You might require a cosigner or guarantor for a loan for a few different reasons. Maybe you are fresh to the rental market and do not yet have established credit. Or you may have experienced financial difficulties, resulting in a lower credit score. Regardless of the reason, if you are unable to qualify for an apartment on your own, you might need to ask a friend or relative for advice.
How to Ask Someone to Help
It’s crucial to be upfront about your financial situation when requesting a cosigner or guarantor. Describe your need for assistance and what would happen to them if you were unable to make rent. A copy of your lease agreement or proof of your income should be given to them as well. Finally, make sure they are aware that if you are unable to pay your rent, they may be held accountable. Because of this, it’s best to select a reliable and financially secure person.
It takes a lot of thought to ask someone to cosign or guarantee a loan. The right person, however, will be happy to assist you if you are open and honest about your financial situation and the risks involved. If you have additional inquiries, please contact one of our Ewa Beach property managers.
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We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.