Requiring a cosigner when co-signing an apartment lease is a common prerequisite for many property owners, especially if they are concerned about the renter’s credit history or a low salary. Often, young renters or renters with a poor credit history can rent nicer apartments when they have a cosigner to put the landlord at ease. However, if you are considering cosigning a loan for a friend or family member, there are several questions to consider before signing on the dotted line.
According to Experian.com, by cosigning an apartment lease, you are legally responsible for paying rent on the apartment if the renter loses their financial stability or chooses not to pay, as well as for any damages to the apartment. The first thing to consider is if you have the extra income to make payments if the renter is unable. If you are not financially able to make payments, or it would stress your monthly budget, it is not a good idea to cosign the lease. Even if you have complete faith that the renter will make their payments each month, you should still make sure you have the money to pay their rent in full. There is never a good reason to put yourself at financial risk.
How Responsible Is Your Co-Signer?
The next factor to consider in cosigning for a lease is the responsibility of your friend or family member. The renter might be a good friend or a supportive family member, but it is important to know whether they are financially responsible with their credit cards and other bills. Don’t be afraid to ask for copies of their credit card statements or to look at their credit history to see if they have made late payments before. If there is a roommate for the apartment lease, make sure that you are every bit as confident in their ability to make payments. Remember, you are the one who will have to pay their rent each month if they fail to do so. Many family ties and friendships have been broken over unpaid leases.
It’s also not unreasonable to ask the landlord to send you a notice if the renter does not make payments. This way, you will be able to address the problem proactively with your family member or friend before the landlord hires a collection service or takes you to court for the remainder of the money owed. Always consider all the options and talk through each situation through with your co-signee so that they too understand the seriousness of the agreement.
While it is very important to you to help your family and friends find a sizable, modern apartment in Waukesha, it is never smart to compromise your own financial stability for any reason. Make sure you are choosing to co-sign a lease with eyes wide open to all the consequences.
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