Private Mortgage for Friend

[Caribun]

I hope someone can help as we're getting very confused thinking about it!

We're in the very fortunate position of moving to our new home with no mortgage and wanted our friends to move into our current house. They're struggling to get a mortgage, so were going to arrange a private loan/mortgage between us with no deposit, no interest and approx 75% of the value of the house to give them a helping hand.

The problem we keep getting confused with is what they'd do if they wanted to move. They'd need a 'proper' mortgage if they wanted to move, but they'd still owe us money if they moved before the term was up?

We have no desire to be landlords, and they want/need to get onto the property ladder so please don't suggest that we rent to them!

We were in a similar situation a while ago when we wanted to help a family member buy our house without the typical bank process. We ended up working with a private money lender to arrange a loan that made the whole process easier. What we learned is that if your friends want to move out before the loan term is up, they would still owe you the remaining balance. So, if they were to sell, they’d need to pay back that amount, or they could potentially refinance to pay off your loan. It's definitely worth consulting a professional to get everything set up right, but I can say it worked out well for us, and it felt great helping someone get on the property ladder without all the hurdles.