FAQ's – Step One Finance

Frequently Asked Questions

Is Step One Finance a UK company?

Step One Finance is a specialist consumer lender with over 15 years’ experience in providing and servicing mortgage loans. We are authorised and regulated by the Financial Conduct Authority (FCA) and are committed to Responsibility, Transparency, Fairness and Simplicity in everything we do.

What is the Step One Base Rate?

The Step One Base Rate has been introduced to provide greater transparency to our customers around rate changes in our variable interest rate products and to better match the cost structure of our funding. More information can be found on the Step One Base Rate page.

What is a second mortgage loan?

A second mortgage loan is secured against your home in the same way as your first mortgage.  Your property or home may be repossessed if you do not keep up repayments on your mortgage.

How do I find out how much is outstanding on my mortgage loan?

The outstanding mortgage loan balance is on your annual statement. If this is out of date or you don’t have one, please contact our customer services team on 01483 661 100.

What happens to my Step One Finance second charge mortgage loan if I’m moving home?

Your Step One Finance second charge mortgage is not portable. It will be repaid from the proceeds of the sale of your property, but you may be eligible for a new mortgage loan on your next property. You should make an enquiry by contacting us to discuss your new mortgage loan requirements with our customer services team on 01483 661 100.

What are your tariffs and fees?

Step One Finance’s standard schedule of charges will apply going forward, and you can view this via our website: https://www.steponefinance.co.uk/legal-notices/#fee-tariff.

Why do we require information about the source of funds for financial transactions?

We adhere to strict regulations set by regulatory authorities, which require us to identify and verify the source of funds being used in financial transactions. This is to prevent financial crimes such as money laundering, fraud, and financing of terrorism. By collecting information about the source of funds, we can ensure that all our customers are using legitimate funds and that our systems remain secure. We understand that collecting this information can be time-consuming, but please know that it is a legal and regulatory requirement that we must adhere to. Your cooperation in providing the required information is greatly appreciated and will enable us to continue providing you with the best possible service.

If you plan to redeem your mortgage account independently, with no Solicitor acting on your behalf, we must obtain the source of funds under current legislation. Please provide us with the relevant documents from the list below to provide evidence of the source of funds used to fund your transaction.

Please note that the following is only an indicative list, and we may need to ask for more information or evidence to verify the documents provided.

Source of Funds	Evidence Required
Savings	Accumulated savings Recent copies of consecutive bank statements showing the build-up of savings. Please note that statements must be on bank-headed paper. Internet statements that do not show the account holder’s name, bank account number, name and address will need to be verified by the bank. Large deposits Where a large deposit has been credited to the bank account, additional documentary evidence will be required to verify its source. Our Customer Services team will be able to help with what documents would be appropriate for each circumstance.
Sale of Property	Signed letter from Solicitor or Estate Agent / Contract of sale/ Completion statement.
Sale of Investments	Statement from investment provider.
Maturity or surrender of life or endowment policy	Maturity statement or letter from the policy provider.
Inheritance	Copy of will /signed letter from Solicitor/Grant of probate/Executor`s letter.
Gifts	Gift letters, along with the bank statement of the person making the gift.
Sale of vehicles	Bank statement showing deposit of the proceeds of the sale. V5C logbook copy.
Settlement of mortgage loan by parents or other relatives	Bank statement of the parent(s)/relative making the payment, clearly showing their name, address, and amount debited in their account on bank-headed paper. A signed note from the parent confirming the payment on behalf of the customer. Proof of ID of the parent/relative.
Sale of Business	Business banking statements.

We assure you that all the information we receive will be kept secure, confidential and only used for regulatory compliance. We appreciate your cooperation in helping us maintain the integrity of our business and comply with regulatory guidelines.

Should there be any questions, please call our Customer Services team on 01483 661100.

Why does my mortgage loan balance not reduce more quickly?

To understand how your mortgage loan balance reduces over time it is important to first understand how your monthly mortgage payment is calculated. With a capital repayment mortgage loan, a portion of your monthly payment is applied to the interest due and the remainder is applied to reduce the capital balance each month. This is different from an interest only mortgage loan where only the interest due is paid each month and the outstanding mortgage loan balance remains the same.

Your monthly mortgage payment is calculated as the fixed payment amount that will reduce the outstanding balance to zero over the mortgage loan term based on a number of simplifying assumptions (no change in interest rates, equal monthly periods, etc.). Because the capital balance of your mortgage loan is the highest at the beginning of the mortgage loan the portion of your monthly payment that is allocated to interest is initially greater than the portion that is allocated to capital. Over time as your mortgage loan balance reduces the portion of your monthly payment that covers the interest will reduce and, correspondingly, the amount allocated to capital will increase.

A very simple illustration of this can be seen by looking at the first 3 payment periods in a hypothetical 15-year mortgage loan with a balance of £25,000, an initial fixed rate of 8.9% and initial monthly payment of £252.08.

Period	Days	Start balance	Payment	Interest	Capital	End Balance
1	30	£25,000.00	£252.08	£182.88	£69.20	£24,930.80
2	31	£24,930.80	£252.08	£188.45	£63.63	£24,867.16
3	30	£24,867.16	£252.08	£181.91	£70.18	£24,796.99

As set out in the illustration above, in the first month if the period is 30 days long the interest accrued will be £182.88 (£25,000.00 * 8.9% * 30 / 365 = £182.88) which means £69.20 (£252.08 – £182.88 = £69.20) of the monthly payment will be applied to reduce the capital balance. In the second period the interest accrued is slightly higher because the month has 31 days and in the third period the interest is slightly lower for the 30 day period because the capital balance is decreasing. It is important to understand that your mortgage loan balance will decrease by the amount of the payment allocated to capital only and not by the total amount of your monthly payment.

The proportion of your payment which is applied to interest will be initially greater if your mortgage loan term is longer and lower if your mortgage loan term is shorter. This means that the longer your mortgage loan term the slower your mortgage loan balance will reduce over time because of how the calculations work.

Please note that your actual mortgage loan balance over time will depend on when you make your payments, any fees or costs incurred and any variations in the rate of interest over the term of your mortgage loan. The interest on your mortgage loan is calculated on a daily basis based on the current outstanding balance and the rate of interest applicable at that time. Please refer to your mortgage loan documentation and mortgage loan terms and conditions for complete information.

Why do I need to pay an additional interest amount if I change my payment date?

You will only need to pay an additional interest amount if you move your payment to a date that is later than your next scheduled payment date.  This is because your mortgage loan accrues interest daily, and each month, a portion of your monthly payment is applied to mortgage loan interest based on the number of days in the month and the remainder is applied to reduce the outstanding mortgage loan balance.  If you increase the amount of time since your last payment was made, then the number of days in the periodic interest calculation will also increase.  Any additional interest amount will be determined by 1) your mortgage loan balance, 2) your rate of interest and 3) the number of additional days that are added in connection with the payment date change.

As seen in the example below, if your last mortgage loan payment was on the 15^th of April and you would like to move your payment date in the next month from the 15^th of May to the 25^th of May, that will add 10 days to the interest calculation for that payment period.

Assuming a hypothetical mortgage loan with a balance of £25,000.00 and an interest rate of 8.9%, each additional day added to a calculation period would add £6.10 (£25,000.00 * 8.9% * (1/365)) to the payment in the period the change is made.  This means that if you moved your payment 10 days forward, the additional amount would be £60.96.  In the following month, your payment would revert to the standard monthly amount because there will be a normal period from the 25^th of May to the 25^th of June.

It is important to note that the additional interest amount relates only to the increased number of days in the calculation period associated with moving your payment date forward and does not represent a fee or any form of penalty.

If you are unable to afford the additional interest amount that arises at the time of a payment date change, there are a number of options available which can spread the amount over an agreed period or alternatively increase the term of your mortgage loan.  Please be aware that making payments later or over a longer period of time can increase your total cost of borrowing.

What payment options do you provide?

We offer various methods for you to make your monthly payments, including:

Direct Debit

Bank Transfer
Debit Card Payment
Cheques

Do I need to create a new online account?

Step One Financial Limited provides all customers with secure online access to their mortgage information through our Customer Portal.

To register please follow this link: Customer Portal Registration Guide - Step One Finance

What are the benefits of registering for the Customer Portal?

By registering, you’ll be able to:

View and manage your mortgage via desktop or mobile at any time
Access statements and important documents securely
Request redemption statements online
View payment history

Customer Portal provides a secure, convenient and paperless way to manage your mortgage.

How can I update my mobile or email address to ensure information is sent to the correct contact?

You can securely update your details with us by sending the new details of your phone number or email address to: customerservice@steponefinance.co.uk.

How are notices and disclosures delivered?

All required notices, statements, and disclosures are provided by Step One Finance in accordance with delivery preferences held on file and will be seen on your account within the Portal if you have registered.

Who can I contact if I have a complaint?

Complaints can be submitted to us using any of the details below and our complaint procedure can be found here: SOFL-Customer-Complaints-Procedure.pdf

Complaints Team

Step One Finance Limited

Premier House 15 – 19 Church Street West

Woking,

Surrey

GU21 6DJ

Telephone: 01483 661100

Email: complaints@steponefinance.co.uk

Where can I find your privacy notice?

The information on how we handle personal information can be found here:

https://www.steponefinance.co.uk/legal-notices/#fee-tariff.

If my Direct Debit failed, will you try and collect my Direct Debit again?

Yes, we will look to recollect within the following 5 days. 

Can I change my Direct Debit details?

Yes, you can change your Direct Debit please contact our customer services team on 01483 661 100, who will be happy to assist.

Will I incur any charges to redeem my mortgage?

There may be charges when you redeem your mortgage. Please refer to our Tariff of Charges for details of any applicable fees, found here; Tariff of Fees and Charges

Can I make a lump sum overpayment?

Yes, you can make a lump overpayment on your mortgage loan. This may either reduce your monthly repayments or shorten the overall term of your mortgage loan. Please note that there may be limits on the amount you can overpay without incurring charges, in line with the terms and conditions of your mortgage loan agreement.

Can I repay my mortgage loan early?

You can repay your mortgage loan early at any time. There may be some costs associated, as explained under the ‘early repayment’ section of the terms and conditions of your mortgage agreement. Please note that, depending on your mortgage loan type you may be required to pay a discharge fee which is related to the costs we incur in relation to closing your mortgage loan account. Our Tariff of Fees and Charges can be found here; Tariff of Fees and Charges

How are my fees and charges repaid?

Fees and charges are not automatically repaid. If you would like to repay them separately, please contact our customer services team on 01483 661 100 to discuss the options available.

My account is redeemed. But it is still showing that I have a mortgage with you. Why?

Once your mortgage has been redeemed, it can take some time for your records, such as, the Land Registry and a Credit File to be updated. If your mortgage is still showing as active, please allow time for the update to be processed. If it continues to show after a reasonable period (1-2 months), please contact us and we will be happy to investigate.

I have a Buy to Let mortgage. Is there a specified form of tenancy agreement that must be used when letting the property?

Yes, any tenancy agreement must meet the requirements of your Buy to Let mortgage conditions. Please refer to your mortgage offer or contact us if you are unsure.

I have a Buy to Let mortgage. Can I rent the property to a family member? 

No, renting your Buy to Let property to a family member is not permitted and would be a breach of your mortgage terms and conditions.

Can I change the repayment method of my mortgage?

Yes, you can request to change your repayment method. Please contact our customer services department on 01483 661100 or email us customerservice@steponefinance.co.uk.