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My friend and I bought a $68K townhome. I paid the $24K deposit. The mortgage is 10.8%. The plan is to own the property 50-50, so we’re writing a legal contract between ourselves. Any suggestions on the fairest way of doing this?


You've quickly glided past a key detail: You bought this place with a 10.8 percent mortgage. That would be a horrible rate for someone putting no money down, let alone for buyers whose down payment was just over 35 percent of the property. With mortgages available at roughly half the rate you're paying, the first thing you and your friend should do is refinance.

You say the two of you are writing a contract, I assume to set down what each of your ownership stakes is and what your respective obligations will be. That begs the question: Whose name is on the title? Do you own the property yourself, or do you and your friend own it jointly? I think an equitable arrangement is for your friend to pay $34 plus interest on the mortgage for every $10 that you pay. In essence, your friend owes $34K to fulfill her financial obligation to the mortgage's principle, while you owe $10K.


-Conrad de Aenlle