Our friends at SmartMove contributed an article on pro’s and con’s of using cosigners on a lease.
Some landlords allow cosigners while other landlords avoid them. There are legitimate reasons to explore using a cosigner on the lease. Let’s explore this further.
First of all – what is a consigner? A cosigner is a person named on the lease who is ultimately responsible for making rental payments. Some rental applicants might want to add a consigner because they have lower incomes, have borderline credit or bad credit profile or have a thin credit history. By adding a cosigner, then the applicant might have a better chance to qualify for a rental property that they might not get on their own.
There are advantages to accepting a consigner. With a cosigner, then a landlord could decide to loosen their screening criteria which could help fill a vacancy more quickly. A highly credit-worthy cosigner can give the landlord greater confidence to receive payment. Also if things go wrong, then a landlord can have more options in terms of recovering overdue rent from the renter and/or cosigner.
Conversely, some landlords don’t like using cosigners because it can suggest that the renter presents greater risk in terms of past behavior or with their financial profile. And currently in a market that favors landlords, where rental housing supply is low with an abundance of renters seeking housing, landlords can afford to be choosey and find renters who meet their criteria.
If a landlord does move forward with a consigner, then SmartMove recommends to make sure to conduct rental screening for the consigner as well. Landlord’s should do their diligence to ensure that the cosigner has the financial means to cover renter payments, should the need arise, and has an attractive credit profile.
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