I am renting my house now for 1125$ which is a lot. I can only do it, because I have room mates who I know and trust for many years. We've been room mates for awhile now, and since I've been deployed I will be getting the VA Home loan benefits (5.625% fixed). I would love to buy the house right now, but I don't want to have my friends feel like I am taking advantage of them (since they'd be splitting rent still and paying my mortgage off). 2 of my room mates are okay with this and it is understood they will be leaving in a year or two to a different city. The other room mate however, is more opportunistic, and when I mentioned getting a home loan, he said he would like to buy in. The best way I know of with my limited knowledge to be equal owners in every aspect, is to be co-owners.

Everyone seems to be okay with this, but both he and I would like to get this down in a contract form, so that neither of us gets taken advantage of. What are some what-ifs to look out for, or what might be a better way to do this? He is just like me, I am tired of paying off someone else's mortgage, and would like the overly expensive rent to go toward something of value. He just wants his rent to mean something too. Any advice on this situation would be wonderful, even if it is advice against this idea.

You put up equal amounts of a down payment, you buy the house as Joint Tenants (but not with right of survivorship), you both co apply for the mortgage. If you want to draw up a contract that you share equally in the costs of utilities and the income from any rentals, that would pretty much nail it down.

I agree with Scott, with the exception that the two of you should take title as "tenants in common" rather than as joint tenants. This means that if one of you dies, then that person's share of ownership passes to their estate.

Thank you for the advice, I didn't know about Tenants in Common, so that will be helpful ^_^ Any more advice can be handy, but that gives me a good start!