College – Apartment ABC

Moving into your own apartment comes with a lot of responsibilities, which makes the whole process a little daunting especially when it comes to the financial aspect. Even before you move in, there are usually a lot of requirements that landlords from potential tenants in order to verify that you will be a good fit. It is not uncommon to seek the help of your parents when it comes to the responsibilities of moving into a rental unit. Can my parents lease an apartment for me? Your parents can lease an apartment for you for a variety of reasons: You don’t have any credit or your credit score is low. You may not have a rental history that a landlord can use to gauge if you will be a good fit.You may not be able to afford the rental unit since you are not employed or because you just got a job. A parent can serve as a guarantor and sign the lease agreement with you, which means they are responsible for paying for your apartment when you can’t pay the rent. Renting an apartment is not easy considering all the requirements you need to qualify as well as the responsibilities you have to take care of even after you move in. Thankfully, your parent can help you out by serving as a rent guarantor, and help you take care of some of the responsibilities. Before you ask your parent to take on this heavy responsibility, here is what you need to know about apartment guarantors. What is a guarantor? A rent guarantor is anyone who is willing to step in when you are not able to keep up with the monthly payments. Keep in mind that by signing a lease with a guarantor, you are both agreeing to the terms of the agreement, so it is important to choose someone you have complete faith in, like a close friend or in this case, your parent. Even though your parent co-signs the lease agreement, they don't live in the apartment with you. In fact, some landlords usually require the guarantor to be a homeowner just for extra reassurance. Usually, the landlord require your guarantor to be in-state or local, but it is increasingly becoming the norm to accept out-of-state guarantors as well. Why would you need a rent guarantor? These are the main reasons why you might need a guarantor: Undesirable or no rental history - If you are renting an apartment on your own for the first time, then you are likely going to need a guarantor on your lease. This is because you don’t have previous records to prove that you are a trustworthy tenant, and having a lease guarantor is your best chance of getting the apartment. On the other hand, if you were not particularly popular with your previous landlords, then you are going to have a hard time getting a potential landlord to approve your application. In this case, you might also need someone to sign the lease with you as well. Low or little credit history - Another reason why you may need a lease guarantor is if you have little or no credit history. A landlord uses your credit score to measure your ability to pay rent so you may miss out on an apartment you like based on this criterion. Opt to go for a reliable guarantor with a good credit score. If you have low credit, you will have a harder time finding an apartment. In addition to having a guarantor, consider going for privately owned apartments rather than larger apartment complexes owned by companies. Low or no income - Ideally, your income should be at last three times higher than your rent. If your income is not sufficient or you are yet to get a job, one of the best options is getting a guarantor as you try to get on your feet. What are the qualifications for my parent to be a guarantor? In order for your parent to become a guarantor, he/she must make at least 80 times the monthly rent annually and must have good credit as well. This is required so as to prove the guarantor can cover your rent while still managing their own finances. As mentioned before, a guarantor must have great credit as well, with many landlords requiring anything from 750 and above. What paperwork is involved? Once your rental application has been processed, most landlords will supply a form for the guarantor to fill out as well. This form is a separate application that the landlord can use to determine whether the parent applying to be a guarantor is financially stable. There may be a separate guarantor agreement which is signed in addition to the lease, or the landlord might opt to make the guarantor agreement part of the rental agreement. Here are the documents a guarantor will be required to provide: A copy of a government-issued ID such as their driver’s license.Copies of their two most recent pay stubsCopies of their two most recent tax returnsIf they are self-employed, they will need two of the most recent monthly bank statements instead of the pay stubs.Some landlords may also require a letter from their employer detailing their position and duration of employment. Instead of giving you these personal documents, your guarantor can send the required documents directly to the landlord. Out-of-state guarantors If the parent that intends to be your guarantee is not within the state, make sure you ask a potential landlord since some of them may not be too willing to work with them. Multiple guarantors It would be nice if both your parents and even a couple of close relatives could help out with your rent, but this is not an option since most landlords usually want one person to serve as a guarantor. This makes it less of a hassle to collect missed rent payments since they will only be dealing with one person. What happens when you miss rent payments? In addition to being legally required to remit the payments you miss, the credit score of your guarantor may also take a hit depending on how many deadlines you have missed. What if my guarantor falls behind on payments as well? If your guarantor is unable to make rental payments on time, both your credit scores will be affected, and you will be billed with late fees as well. If the landlord suspects that the guarantor will not make the payments at all, they may take legal action such as suing you or evicting you. Another option the landlord may take is utilizing a collections company. Your guarantor will be named in any legal suits and collections as well. What if you don’t have anyone to serve as your guarantor? Some parents may not be too willing to serve as guarantors since it is potentially risky especially when you consider that their credit scores could be negatively impacted. Furthermore, if you have roommates, your guarantor is also responsible for their payments and any damage they may cause to the unit, which explains why some parents may be reluctant. If you are keen on getting a guarantor, consider apartment guarantor services such as Insurent, The Guarantors, and American Cosigners. For a given fee, they can help with the entire process of renting an apartment. Moreover, if you plan on having roommates, you can split the costs since the fee of their services is per lease. If your parents have bad credit or they simply don’t meet the financial requirements of the landlord, then you may have to consider other than options. If you have your own savings, consider offering a potential landlord a higher deposit. Consider paying six months of rent upfront to show that you are able to keep up with the payments. You could also provide bank statements to prove that you are able to make monthly rent payments. Another great option is moving in with a couple of roommates so that you can help each other out when it comes to payment of rent and utilities. Related Questions Can apartment guarantors pull out of the lease agreement? If your financial capabilities or your relationship with the person you signed for changes and you want to pull out of the agreement, you will typically wait for the lease term to run out. Keep in mind that you only have to pay rent if the tenant is unable to, so it is quite possible that you won’t have to part with your hard earned cash as a guarantor. However, if you insist on getting out of the agreement, the tenant may then appeal to the landlord to remove you from the lease. What can you do if you can’t afford your rent? If you know your rent is going to be late, ensure that you inform your landlord. By providing him/her with a notice, it shows your willingness to be transparent and take to responsibility for the delayed payment. The next step is to discuss the possibility of partial or delayed payments with your landlord. Remember that you can still be charged a late fee for delayed payment, but there is a possibility of your late fee being waivered if you are candid.