Co-signer experiences

[Amy Shari]

Hi there!

So I have a new applicant for my small house in a blue collar neighborhood. It is a very young couple with a child. Because of their lack of credit history (hers) and previous credit issues (his) I told them within a few minutes that I would not be able to rent to them.

They asked if I would consider a co-signer and I said I had never considered doing that before and I would have to think about it and of course it would require the co-signer to have excellent credit.

They came back with the young girl's Big Brothers/Big Sisters mentor that has known her since the age of eight. This woman and her husband have impeccable credit. They have been married over forty years, owned their own house for 36 years, he has worked at the same job for 29 years and makes over $60,000. This older couple has agreed to co-sign for the younger couple on this lease. I am torn over what to do.

The younger couple both have jobs (he has two jobs) and their income to rent ratio falls under 30%. But I am wondering if the older couple are making a mistake.

I look at the younger couple and think that if I was them I would be living in a small one bedroom apartment and just dealing with it...saving up money etc..which would be in this neighborhood about $675...instead of looking at my two bedroom house (800sq feet) at $850.

I would love to hear experiences you all have had with co-signers good and bad.

[Jon Holdman]

I won't claim to be a truly experienced landlord. Far from it. But I pay little attention to credit. I've had exactly one tenant that had good credit and they disappeared owing me rent. I've had tenants with bad credit pay on time month after month and leave the place spotless. You seem to be saying you're verified employment and they meet your income guidelines. I assume criminal background and eviction history is OK. I would rent to them. I only do month-to-month, so if it doesn't work out, I give them notice.

I think you're projecting too much of your own values onto these applicants. That can be can be a disaster if you bump into a fair housing violation. You say you think they should be renting a cheaper, smaller place because they're just a young couple just string out. Those are your values, not theirs. If there's some reason not to rent to them, including credit if that's your criteria, don't rent to them. But don't judge them by your values.

I would rent to them, without a co-signer, on a month-to-month lease, assuming the other factors were acceptable.