Renting an Apartment With a Cosigner: All You Need to Know

The rental market can be ruthless, and it might feel like you have to jump through a million hoops just to be approved for even the most modest of apartments.

But finding a cosigner for your apartment could boost your financial credibility and push your rental application to the top of the pile.

Let’s take a closer look at what cosigners do and how working with one could benefit you as a renter.

TL;DR

• A cosigner could help you get approved for an apartment if you don’t meet your landlord’s financial requirements.
• Unlike a guarantor, who only steps in when you default on payments, a cosigner is equally liable from the start of the lease.
• So long as they’re in good financial standing, a cosigner could be any trustworthy third party, from a parent to a friend to a significant other.

Here’s what we’ll discuss:

• What is a cosigner?
• What’s the difference between a cosigner and a guarantor?
• What are the cosigner’s responsibilities?
• What makes a good cosigner for an apartment lease?
• Should you get a cosigner for your apartment?

What is a cosigner?

A cosigner is a person in good financial standing who agrees to act as a safety net for a tenant should they default on payments. If, for instance, you’ve just found your dream apartment, but your finances don’t meet your landlord’s conditions, they might require you to ask a parent–or other reliable third party–to act as a cosigner.

And, even if your landlord doesn’t require it, a cosigner could still elevate your rental application by indicating that you’re good for the money if you ever become unable to make rent or cause damage that you can’t afford to repair. (We’ll get more into who could make the best cosigner for your circumstances below.)

Here are a few reasons you might need a cosigner:

• You have a low credit score.
• Your income doesn’t meet your landlord’s requirements.
• You’re a first-time renter with no established rental history.

What’s the difference between a cosigner and a guarantor?

Both cosigners and guarantors have the same general responsibility of ensuring that rent payments are made on time, but there are some key differences.

A guarantor typically steps in only when you default on payments. A cosigner, on the other hand, is equally liable from the start–and even has the same legal rights to the space as you do. (If you’re signing a lease with a roommate, they’re  technically considered a cosigner too.)

What are the cosigner’s responsibilities?

A cosigner holds essentially the same responsibilities as the primary tenant. This means that if you, the tenant, struggle to make rent, your cosigner is legally obligated to cover the amount you owe. 

It’s also important to note that the cosigner’s responsibilities extend to all tenants on the lease. So if, for instance, your mom cosigns on your three-bedroom in Bushwick that you’ll be sharing with two other roommates, she would also be legally responsible for their missed rent payments too. 

What makes a good cosigner for an apartment lease?

Your cosigner must be at least 18 and in good financial standing–especially since they could also be subject to the extensive tenant screening process. 

While parents are the most common kinds of cosigners, your cosigner could really be anyone from a relative to a significant other to a bestie willing to back you up. Just make sure to pick someone you trust (and who trusts you in turn) should things ever get sticky.

In fact, finding the right cosigner is a little like choosing a good roommate: you want someone who is a good communicator and who can handle the financial responsibility of a lease.

Before making it final, sit down with your potential cosigner and discuss everything that the cosigning relationship will entail and how you’ll want to handle certain situations. Ideally, you won’t need to fall back on your cosigner at all, but it’s always a good idea to open the lines of communication early and make a contingency plan.

As you talk through everything, you should also discuss whether or not to add your cosigner to your renters insurance policy as an additional insured–which some landlords already require. Having them on your policy could come in handy if you ever need to file a claim.

Should you get a cosigner for your apartment?

If you’re unable to meet the financial criteria for any potential apartments, getting a cosigner might feel like more of a necessity than a choice. And, in some cases, a cosigner could even help land you a sweeter deal.

However, if you already have good credit and an established rental history, working with a cosigner might be more trouble than it’s worth. Let’s take a look at some of the pros and cons.

Pros

• Easier path to landlord approval: A cosigner could mean the difference between acceptance and rejection if you don’t meet the landlord’s income requirements.
• Negotiations: If you’ve already been approved but want to negotiate your rent, this could help build your case.
• Better apartments: A cosigner could expand your options, enabling you access to nicer places than you would’ve been able to secure on your own.
• (Potentially) lower security deposit: Some landlords offer lower security deposits to applicants with cosigners since they indicate that you’re a lower risk tenant.
• Peace of mind: Although you never want to rely on your cosigner, having one to back you could mitigate some of the financial anxieties associated with committing to a lease.

Cons

• Long-term legal commitment: Cosigners are legally on the line for the duration of the lease, which can be as long as a year or more.
• Credit risk for the cosigner: If you’re late to make payments or violate the terms of your lease, your infractions could potentially hurt your cosigner’s credit or rental history as well.
• Difficult to remove from the lease: If you become financially independent and no longer want the cosigner on your lease, or, alternately, if the cosigner is no longer willing or able to financially support you, it can be complicated to change the lease.
• Tricky relationship to navigate: Asking another party to take a financial stake in your life can potentially strain your relationship. If, for instance, your rescue puppy, Bubbles, were to chew away at the window trim and baseboards of your rental unit, your cosigner could wind up having to pay for the pet damage. Depending on your relationship, this might not be such a big deal, but make sure you’re both on the same page about how to handle certain situations.

Before you sign on the dotted line…

If you’re a new renter or still getting on your feet financially, a cosigner can be a valuable lifeline. Just make sure to do your research and familiarize yourself with everything about the process before taking the plunge.

And, once you’ve finished the paperwork, don’t forget to sign up for renters insurance. Finding and getting approved for an apartment can feel like a marathon, but you can get a renters insurance quote from Lemonade in seconds.

A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage and discounts may not be available in all states.