Finding your first apartment involves a lot of work. You may have to research for hours just to find suitable apartment buildings in your area. Going through the interview process can be a hassle as well.
Unfortunately, there’s no guarantee that you’ll be approved for the apartment even after going through all of that. You could be denied because the landlord is skeptical of your ability to make rent payments on time. In that case, you may need the help of a guarantor to gain approval.
A guarantor can act as your safety net when it comes to making rent payments. If, for whatever reason, you’re unable to pay your rent, the guarantor will step in and cover the expenses. A guarantor isn’t always required, but there are times when landlords may deny approval until a tenant finds one.
After finding your ideal apartment, it would be very disappointing if the landlord denied your approval. Not all is lost though as a guarantor can still change their mind. Learn more about the importance of having a guarantor and other relevant topics by reading on.
Table of Contents
- The Role of the Guarantor
- When Will You Likely Require a Guarantor?
- Who Can Be Your Guarantor?
- What Other Options Do You Have if Don’t Know Someone Who Can Be a Guarantor?
- What Are Limited and Unlimited Guarantors?
- Related Questions
The Role of the Guarantor
You’ll be able to find many tips online and from the people in your life about approaching an apartment interview. They’ll tell you to prepare all the documents ahead of time, pick out your best outfit, and go through practice interviews.
Truthfully, you can do everything right during the interview and still wind up being denied. It may not be something you said that earns you denial. Instead, it’s the lack of confidence that the landlord has in your ability to pay rent that gives them pause.
At the end of the day, running an apartment complex is still a money-making venture. If the landlord isn’t confident that you can pay reliably, they likely won’t approve you. You can try to reason with the landlord and offer promises, but that may not be enough to convince them. The best way to earn their approval is to partner with a guarantor.
The role of the guarantor is simple. They get involved to provide assurance to the landlord that the rent will be paid no matter what. Once you’re unable to pay your overdue rent, the guarantor will have to step in and hand over the money.
Also note that the guarantor has to sign the lease agreement along with the tenant. This further gives the landlord security in the event that their tenant is unable to pay.
When Will You Likely Require a Guarantor?
Not everyone needs a guarantor in order to be approved for an apartment. If you’re wondering why you weren’t approved, the reasons below may shine some light on the landlord’s reasoning.
You Have a Bad Credit History
The financial mistakes you made in the past don’t just fade away. Things such as late payments, defaulting on loans, and even bankruptcy filings are all recorded in your credit history.
Once your landlord gets the chance to view your troublesome credit history, it’s hard to blame them for being apprehensive. Even if you’ve been more responsible with your finances recently, it’s difficult to shake those mistakes.
Your prospective landlord may not have full confidence in you to pay on time due to your credit history. They may be willing to set it aside if you have a guarantor though.
You Have No Credit History
Bad credit is not the only reason why you may be denied approval for your preferred apartment. Having no credit history whatsoever can also be an issue for your landlord.
The lack of credit history is bad because it doesn’t give the landlord any reference to use to determine your reliability. The good news for you is that this is easier to fix compared to bad credit.
Before applying for an apartment, take the time to start using your credit. Build up your score well ahead of when you’ll need it. That way, you won’t need a guarantor anymore during the negotiations.
There Are Issues with Your Income and Employment
Landlords heavily weigh your money-making ability when deciding whether or not to approve you for one of their apartments. They will scrutinize your income and see if you can reliably make payments on time.
At a minimum, most landlords want their tenants to have steady jobs before they issue approval. If your current employment status is iffy, they will likely doubt your ability to make payments. Big gaps in your employment history can also give the landlord a reason to deny your application.
To alleviate their concerns, you will likely have to provide proof of your employment and your monthly salary. Still, the landlord may not like what they see and that means you’ll need a guarantor.
Who Can Be Your Guarantor?
Finding a guarantor is not super difficult. You may already have people in your life who can take on that role for you. There are only a few qualifications that a guarantor will have to meet.
The first requirement is that the guarantor must be over the age of 21. They cannot sign on the lease agreement alongside you otherwise. Guarantors should also not present the same issues you did during the application process. What that means is that a guarantor must have a steady, well-paying job and a good credit score. Landlords are also more amenable to working with guarantors who are homeowners.
As long as the guarantor meets those qualifications, they can answer for you. Your spouse, your family member, or even a friend can step up to be your guarantor.
What Other Options Do You Have if Don’t Know Someone Who Can Be a Guarantor?
It’s possible that no one in your circle of family and friends qualifies as a guarantor. Does that mean that you’re out of luck when it comes to snagging that apartment? Well, that may not be the case.
Detailed below are the things you can do if you don’t personally know someone qualified to be a guarantor. Consider the following options carefully as you try to land your target apartment.
Enlist the Help of Guarantor Services
Look online and you should be able to find guarantor services. As you’ve probably guessed, they serve as guarantors for their clients. Landlords don’t have any issue with guarantor services so they can help you out of your current predicament.
Just remember though that guarantor services charge a fee for their services. You may need to pay some money upfront if you want their help.
Negotiate with the Landlord
It’s important to do well on your application interview not just because you’re hoping to be approved right then and there. A good interview can also earn you some favor with the landlord. Making that good impression can pay off in the long run.
The landlord may tell you to find a guarantor, but they may still negotiate with you even without one. It’s on you now to convince the landlord that you can be a reliable tenant even without a guarantor’s backing.
You can give the landlord a reason to approve you by sweetening the deal for them. Try offering to pay some months of rent in advance to show you have the means to be a reliable tenant. As long as the landlord continues negotiations with you, there’s still a chance you can land the apartment without a guarantor.
What Are Limited and Unlimited Guarantors?
The guarantor, whether it’s someone you know or a company, is supposed to answer for any financial shortcomings on your part. Do note though that guarantors can have different types of responsibilities.
When a third party agrees to be your guarantor, they can either be a limited or unlimited guarantor. Differentiating the two is easy enough.
Limited guarantors will only be on the hook for your lease agreement for a limited amount of time. Once that length of time is up, you will now be solely responsible for the lease agreement. They may no longer be held responsible for your failure to pay rent even if the lease remains in effect.
A third party can also be a limited guarantor if they aren’t covering all your financial expenses. They may only agree to cover up to a certain percentage of your rent and that makes them a limited guarantor.
Unlimited guarantors are more favorably viewed by landlords because they take on the full responsibility of your commitment. They commit to paying the full amount if you cannot and they will be included in the agreement until it expires.
What Are the Other Ways a Guarantor Can Provide Assistance?
Guarantors can do more than just help you land your new apartment. You can also seek help from a guarantor if you wish to buy a car. They can also provide assistance if you need to take out a loan.
If you’re asked to be a guarantor, you may want to carefully consider matters before agreeing to multiple transactions. You could be the one who ends up in a tough spot if the person you’re backing runs into trouble.
What’s the Difference between a Guarantor and a Co-Signer?
You may hear some people refer to a guarantor and a co-signer as if they’re the same thing. Although the role of guarantor and co-signer may appear quite similar, they actually have different functions.
As we’ve discussed at length, guarantors are there to back you up and offer security for the landlord. Guarantors are typically needed if you want to rent an apartment. Co-signers are different because they are responsible for the property right from the start. They share an equal amount of responsibility together with you.
Furthermore, co-signers are often mentioned when buying homes and not when renting them. They are considered as a co-owner of the property.