Q. My girlfriend and I are buying a brand new $1.4 million place in New York City. She makes $200,000 a year and I make $60,000. She suggested getting an interest-only loan to help us get out of some debts. What do you guys think?

A. We're all for paying off debts -- especially high-interest credit cards.

Look at the interest rates you are paying on your various debts. Any creditor charging you more than you are paying on your mortgage is a good debt to get rid of. But if you have serious credit card debt -- and a lot of people do -- you should probably start by moving that debt to a "0%" credit card. Take a look at our choices for the three best credit cards for balance transfers. With those cards, every cent you pay will reduce your balance, so you can get rid of it more quickly.

Having said that, we're not big fans of interest-only mortgages. Take a look at our 7 reasons to avoid interest-only loans. Too many borrowers use these loans to get artificially low payments and buy a home they really can't afford.

We're concerned that your combined income of $260,000 a year isn't enough to cover a $1.4 million purchase, especially when you take into account the substantial taxes and monthly condo payments you'll also have to make.

The old rule of thumb is not to borrow more than two-and-a-half times your annual income, and that is only $650,000. One of our mortgage calculators will allow you to do a more sophisticated analysis and determine exactly how much house you can afford. But we suspect the results will be the same.

Just the interest payments on a $1.4 million loan will gobble up more than $8,000, or almost 40% of your combined, pre-tax monthly income. If you're talking about splitting the cost of this apartment 50-50, the interest costs will consume 80% of your monthly pre-tax income.

You know that isn't going to work and raises another big question: Just how are you going to share this huge investment?

We strongly suggest that you go to a lawyer and get a clear contract regarding who's responsible for what and what happens to the property, should you split up. Putting all the details in a clear contract is a necessity for anyone who buys property with a friend or family member.

It's unpleasant to think about the "what if," but unfortunately not all engagements end in "happily ever after." We get questions all the time from people who have failed to take these precautions. Having a contract reduces the potential for squabbling and gets all the issues on the table for discussion before you buy the home.

Whether you're buying a home or refinancing an existing mortgage, we have a mortgage calculator that can help you make the right decisions.