Support We Offer (Forbearance)
Forbearance is support that a lender can provide to customers to assist them in a period of financial difficulty or through a change in circumstance. Most forbearance is designed to be temporary in nature.
It is important to understand that while forbearance is meant to provide temporary support to help you get your finances back on track, there are potential costs and other considerations you should be aware of. If the amount you pay in a month is less than your normal monthly instalment, your total loan costs will increase as the amount you borrowed will be outstanding for a longer period of time (even if the loan is repaid within the original term).
Our Forbearance Tools
Below is a list of the support we may be able to offer. Please select the below options for a brief explanation as well as points of consideration and their benefits.
To help with budgeting, please click here for a copy of our Income and Expenditure forms. Once completed, please feel free to send this in to us, we will be able to review before discussing what support we are able to offer. 
Things to Consider
Please note that discussing available forbearance options will not have a negative impact on your account or credit File. Only your actual payment history and the loan balance are reported.
If you are experiencing financial difficulty or struggling to make your payment, it is always better to contact us to discuss your circumstances to determine what forbearance support may be available and appropriate.
It is important to understand that while forbearance is meant to provide temporary support to help you get your finances back on track, there are potential costs and other considerations you should be aware of.
Think Help
If you are going through any difficult circumstances, we would always recommend that you seek free independent financial advice. By seeking advice, you will be able to speak to an expert who can offer support and guidance. You will also be able to find out if you are entitled to any further support or benefits.
We have entered a partnership with Payplan. Please see here.
Step One Finance will only permit requests for a payment holiday in extreme circumstances at the direction of the FCA or other relevant government authority.
From time to time, there may be Government initiatives and/or support schemes designed to assist customers with mortgage payments as an alternative to repossession. In accordance with MCOB 13.3.4R, SOFL will make customers aware of these schemes. This will generally be provided within the National Homelessness Advice Service leaflet sent to customers as part of the Pre-Action protocol process and by referring them to free debt advice.
The UK Government has announced support for borrowers who are struggling with their mortgage payments. You could be eligible for the mortgage charter support if you’re a residential mortgage customer. Please contact your first-mortgage provider for further details on this.
We will work with each customer to assess their circumstances and tailor our support accordingly to ensure the best possible outcome possible. Not all forms of forbearance will be suitable for everybody, to discuss the above options please contact us on 01483 661 100, or you can email us on customerservices@steponefinance.co.uk. We are open Monday – Friday, 09:00-17:30
Zero Payment Concession
An agreement between lender and borrower to accept no payment being made to their account for a specified month or period of time.
Benefits
- Offers financial respite for agreed period as no payment is expected, this will reduce outgoings.
Considerations
- Loan balance will increase.
- Total cost of borrowing will increase.
- Arrears will increase on account, potentially having a negative impact on credit rating.
- Future monthly payments will need to be increased to clear arrears outstanding on account.
Reduced Payment Concession
An agreement between lender and borrower to accept a reduced & affordable payment for a specified month or period of time. This could include paying the interest proportion of an instalment.
Benefits
- Offers financial respite for agreed temporary period as a reduced payment is to made rather than the full amount due, this will help reduce outgoings.
Considerations
- Loan balance will increase.
- Total cost of borrowing will increase.
- Arrears will increase on account, potentially having a negative impact on credit rating.
- Future monthly payments will need to be increased to clear arrears outstanding on account.
Temporary Interest Rate Concession
In exceptional circumstances an agreement between lender and borrower to have their interest rate amended on a temporary basis. This would mean paying less interest for payments made during the agreed period.
Benefits
- Can allow for a reduced amount due for agreed period.
- Prevents loan balance from increasing as quickly.
Considerations
- Is only a temporary respite whilst a long term solution is sought.
- Arrears could still increase, although slower based on the temporary interest rate.
- Could still have a negative impact on credit rating.
Arrangement To Pay
Once your finances are back on track, an Arrangement To Pay is an agreement where you make a monthly payment greater than your normal monthly instalment amount to clear any outstanding arrears. Demonstration of affordability has been provided to allow for the arrangement to be set up.
Benefits
- Payment of an additional amount will help reduce outstanding arrears balance and may help improve credit file over time.
- The arrangement will typically allow for full repayment of loan by the end of original loan term.
- Arrangement will reflect on credit file.
Considerations
- The amount paid each month will be greater than contractual monthly instalment.
- If arrears are outstanding for a longer period, it can potentially have a negative impact on your credit file.
- If arrears are outstanding for a longer period, it can further increase the total cost of borrowing.
Arrangement To Pay – Norgan
Once your finances are back on track, a Norgan Arrangement To Pay is an agreement where you make a monthly payment greater than your normal monthly instalment amount to clear any outstanding arrears. The amount paid would be based on a calculation to confirm the minimal amount needed each month to ensure that all arrears and fees/charges are cleared within the remaining term.
Benefits
- Payment of an additional amount will reduce your outstanding arrears balance and help improve your credit rating over time.
- The arrangement will allow for full repayment of your loan by the end of your loan term at the minimum amount required each month.
- Arrangement will reflect on credit file.
Considerations
- The amount you pay each month will be greater than your normal monthly instalment.
- If arrears are outstanding for a longer period, it can potentially have a negative impact on your credit rating.
- If arrears are outstanding for a longer period, it can increase your total cost of borrowing.
The term ‘Norgan’ comes from a court case of Cheltenham and Gloucester Building Society (C&G) Vs Mrs Norgan and her husband in 1986. Mrs Norgan borrowed £90,000 for her husband’s business over a term of 22 years. The mortgage was secured on the family farmhouse however due to Business difficulties, by April 1990 Mr and Mrs Norgan fell behind. Because of this C&G sought possession, and this was suspended on several occasions. Before this case, 4 years was usually given as a ‘reasonable’ time to repay the arrears. On appeal, this case tested that time frame, and it was judged that a reasonable time should in fact be the term of the mortgage. This meant that the borrowers would have further time to address the owed outstanding amount providing that the arrears would be cleared within the remaining term.
Arrangement To Pay – Sub Norgan
Once your finances are back on track, a Sub Norgan Arrangement To Pay is an agreement where you make a monthly payment greater than your normal monthly instalment amount to clear any outstanding arrears. The amount paid would be based on a calculation to confirm the minimal amount needed each month to ensure that all arrears are cleared within the remaining term but this will not cover any fees/charges.
Benefits
- Payment of an additional amount will reduce your outstanding arrears balance and help improve your credit rating over time.
- The arrangement will allow for full repayment of arrears by the end of your loan term at the minimum amount required each month.
- Arrangement will reflect on credit file.
Considerations
- The amount you pay each month will be greater than your normal monthly instalment.
- If arrears are outstanding for a longer period, it can potentially have a negative impact on your credit rating.
- If arrears are outstanding for a longer period, it can increase your total cost of borrowing.
- Fees and charges are not covered and will need to be address separately.
For an explanation of the origin of the term ‘Norgan’, please refer to ‘Arrangement to Pay – Norgan’.
Promise to Pay
A promise to pay is an agreement with a customer to make one or more payments on a specified date by a specified payment method.
Benefits
- Allows additional time for a payment to be made.
Considerations
- The amount you pay each month will be greater than your normal monthly instalment.
- No reflection on credit file.
- Should a Promise To Pay fail, an affordability assessment may be required to resume the previous Promise To Pay.
Monthly Instalment Only
An agreement between lender and borrower that despite having arrears/fees and charges on account, the borrower will only make payment of the contractual monthly instalment for agreed duration until finances permit an increased payment.
Benefits
- Pay monthly instalment until affordability permits a higher payment to address arrears.
- Arrears balance doesn’t increase.
Considerations
- If arrears are outstanding for a longer period this can have a negative impact on your credit file.
- Arrears outstanding for a longer period will mean an increase in total cost of borrowing.
Rent a Room/Property Rental
A request from a borrower to either take in a lodger or rent out their residential security address.
Benefits
- The customer can continue to reside in the property.
- Income can be increased to make loan more affordable.
Considerations
- Step One Finance will need to provide consent.
- Monthly bills could increase.
- The lodger will only occupy part of the property.
- Any lettings will need to be offered on a furnished basis.
Term Extension
A loan term extension is where the remaining loan balance is repaid over a longer period than the original term.
Benefits
- Can reduce contractual monthly instalment.
- May help clear an arrears balance over time.
Considerations
- Total cost of borrowing will increase.
- Consideration needs to be given to supporting payments over a longer period of time and retirement plans(if relevant).
- If arrears are outstanding for a longer period, it can potentially have a negative impact on credit rating.
Voluntary Sale
A voluntary sale is when a customer decides that there is no realistic chance of being able to maintain loan payments and/or clear their arrears either currently or in the future. It is considered that a voluntary sale will likely achieve a better return than a distressed sale upon repossession which may increase any eventual shortfall (difference between sale price and outstanding mortgage balances).
Benefits
- Allows additional time for a sale to complete.
- Agreement could be reached to allow reduced payments.
Considerations
- Consent may be required from first mortgage provider.
- Step One Finance would require consent to speak directly with estate agent.
- If sale would lead to a shortfall, Step One would need to complete a full review before providing consent for sale to complete and charge to be removed.
Arrears Capitalisation
A process where an arrears balance is incorporated into the outstanding principal balance and repaid as part of Contractual monthly instalment.
Benefits
- Account will no longer be in arrears which may support with ability to gain future credit.
- Credit file would be updated to show no arrears from date of capitalisation and onwards providing payments were maintained.
Considerations
- Total cost of borrowing will increase.
- Arrears capitalisation will only be considered after all other options to repay the arrears have been looked into.
- Demonstration of affordability based on the proposed capitalised payments would need to be proven over a minimum of 6 months before any capitalisation is agreed.
- Capitalisation is considered a debt restructuring tool and so may affect ability to secure future credit.
- Credit file history will not change.