A guarantor is similar to a co-signer, though the term guarantor carries a more serious liability than the term co-signer inherently does.
A guarantor is a person who co-signs on a lease for a tenant with credit or income that’s not sufficient for approval on their own. A guarantor is “guaranteeing” the payment of rent by putting their own credit and income down as a fallback in case the primary tenant is unable to pay.
1. Anyone can be approved to be a guarantor
You might think that a guarantor has to be a legally defined parent, guardian, partner or spouse. However, basically anyone can be approved to be a guarantor, in theory. The only requirement is that the person signing as a guarantor has adequate credit or income to meet the property owner’s standards for approval.
2. You may not have to sign as a guarantor forever
Signing as a guarantor is a big commitment, but it’s not necessarily a lifetime commitment. Though there’s no expiration on the responsibilities of a guarantor, there is an opportunity to remove the guarantor from a lease agreement. This requires that the primary tenant reach a credit level or income threshold suitable for approval without the guarantor. In fact, in many cases, once the primary tenant has improved their credit or financial standing, you can often just ask the property owner to remove the guarantor from the lease.
3. Most of the time, a guarantor doesn’t change your chances of approval for an apartment
Landlords are legally required to provide housing decisions without personal bias, so most of the time, signing with a guarantor doesn’t make a difference in your chances at approval. After all, the guarantor is putting their name on a legally binding agreement saying they’ll cover any unpaid expenses by the tenant. It’s a pretty safe bet for property owners anyways.
If you need a guarantor, it’s important to know what they do
When renting, if you ever find yourself in a situation where you need a guarantor, it’s important to know exactly what that means. Make sure you choose carefully and never get in a financial situation you can’t handle.