I recently had the following question posted as a comment to an earlier entry. I thought I’d put answer it here since it’s of general interest:

Hi, I had a question actually, I recently graduated and I am moving out with seven other roomates, we are buying a big house, its price is $800,000, I was wondering if you would do me the favor of taking the time and leting me know about how much the payments per month would be if we put it to pay it in 30yrs, among 8 people, just to be informed and be sure that my roomates nor myself are having to pay too much to the two roomates who are signing for the house, I would really appreciate it, thank your for your time…

If you’re buying a house with seven other people, you should have a written agreement drafted up by an attorney, if you’re not already signing paperwork created by the real estate agent, the loan company, and the title company.

Finding out the loan payment is simple — get a copies of the loan paperwork and the settlement statement from the two people who are signing. Or if you need to ballpark it, a good estimate to use for a payment (Principle Interest Tax and Insurance) on a thirty year fixed is $6.50 per month per $1,000 borrowed. But that doesn’t mean you’ve protected your interests.

You should be concerned by the idea that eight people are buying the house, and six aren’t signing. It sounds to me like there are two people buying the house, and six tenants who think they are. You need a written agreement, and if there’s ownership involved, there should be a deed recorded with the county.

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