1. Do you know each other's credit scores?

You and your friend may have no issues with the social aspect of living together, but have you ever opened up about money? While it may feel uncomfortable to talk about your finances with a friend or relative, it's essential when co-buying a home. Before prequalifying for a mortgage and starting the bidding process, lay out your finances and be transparent. You don't want to find out late in the process that one of you has a low credit score or a surprising amount of debt. 

"You need to be prepared for your finances to be on display," said Stults. "Even if you're applying for a mortgage together, you're going to be assessed by the lender as individuals. Banks will use the lower credit score of the two individuals, and that will impact your rate and how much you're approved to borrow. If one of you has a stellar credit score, you can apply alone, but that voids any assets your partner brings to the table -- including salary -- and that will likely weaken your mortgage application," she said.

2. Who will own the home?

You can both own the property, of course, but being a co-buyer does not automatically make you a co-owner. If you both plan to be co-owners of the property, your names will need to be on more than just the mortgage. You'll also both want to be listed on the deed, which is the legal document that passes the ownership of the house from one owner to the next. If you're not on the deed, you have no ownership rights to the house and you risk not receiving proceeds from a future sale.

This is a step that typically gets finalized during the closing process, so be sure to stay on top of the paperwork, rather than letting one friend take the wheel and manage all the documents. 

3. How will you share expenses?

Whether you plan to split the mortgage and related housing costs down the middle or work out a different plan, a legally binding agreement will be essential to the success of this partnership. For this, work with an experienced real estate attorney. 

"It isn't sexy, but it's necessary in case things go south in the relationship," said Stults. "You'll want to spell out things like what each person contributes to the down payment, what each of you will pay toward the mortgage, taxes, utilities and maintenance. And, most importantly, make sure the agreement covers what happens if you break up." Update the agreement when needed to reflect changes you may want to make to these payment structures over time.

To streamline mortgage payments, Stults also recommends setting up a joint bank account together where you pool your housing-related contributions and automatically pay for fixed expenses. Have a buffer in there, too, for unplanned costs like plumbing emergencies or other repairs. You can download free contract templates on sites like Rocket Lawyer or LegalZoom.

4. What if one of you wants to move out?

Anything can happen. What if the relationship ends? What if one of you can no longer afford the mortgage? What if one of you needs to relocate for a job? Working out these hypothetical scenarios ahead of time -- and having your co-ownership agreement written with the help of a real estate attorney -- can ensure that when life happens you're prepared and don't need to scramble. Think of it like a prenup but for your home, instead of your marriage. 

For Georgilis and Mirabella, the friends decided that if one wants to move out, the remaining owner will have the chance to buy out the friend and continue to live in the home. If not, the house will be put on the market to be sold or rented out as an investment property, which may mean they'll form a joint company, like an LLC, to manage this source of income down the road.

In a co-ownership agreement you may also want to include other expectations related to managing and affording the home. "Have an honest conversation about housework and maintenance. Who's going to mow the lawn? Are you both willing to pay for repairs when the water heater breaks down? These seemingly minor discussions can become major financial issues when you're homeowners," said Stults.

5. How will you account for tax breaks?

Only married couples can file taxes jointly and apply for homeownership-related tax breaks on a shared return. Unmarried co-buyers should discuss ahead of time how they plan to account for the mortgage interest and property tax deductions. While only one of the owners can include the deductions on their tax return, together you may decide to split the savings after tax filing season is over. Or, after the first year, you can take turns each year claiming the benefits. Working with a tax expert who can break down the figures may be helpful to ensure you are sharing the tax incentives equally.