Equity Release:

Unlock the Potential

Are you a homeowner looking to unlock the value of your home? Equity release could be the solution you’ve been searching for.

At ZEP Finance, we understand the importance of financial flexibility, and our team of experts is here to guide you through the process of home equity release with clarity and confidence. Let’s explore how you can make the most of your home’s equity to enjoy life now and achieve your financial goals for the future.

Equity Release: A Comprehensive Guide

Financial freedom for Australian homeowners doesn’t have to be a distant dream—it can be a tangible reality, even before retirement.

According to one survey, 50% of Australians are concerned about having enough savings for retirement. However, accessing the equity in your home could open a pathway to flexibility and opportunity that will be beneficial both now and in the future.

Whether you’re planning renovations, dreaming of a holiday getaway, in need of a new set of wheels, saving up a deposit for an investment property or considering an investment in shares, your home equity could hold the key.

In this article, we’ll delve into the intricacies of equity release, shedding light on its definition, benefits and the growing relevance it holds for everyday Australians seeking to enhance their lifestyles and secure their financial futures.

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What is an Equity Release?

It’s a financial arrangement that allows homeowners to tap into the value of their property without the need to sell it. This value, or the home equity, is essentially the difference between the current market value of the property and any outstanding mortgage. To simplify, here’s an equation that explains what home equity is:

Current Home Value – Outstanding Mortgage = Home Equity

However, it’s important to keep in mind that lenders generally will only allow you to borrow up to 80% of the property value. So, how would you calculate how much equity you could potentially borrow against?

Imagine your property was valued at $650,000. If you calculate 80% of the property value, you’re left with a figure of $520,000. If your mortgage balance was $250,000, you would subtract this from the $520,000, leaving you with $270,000 worth of equity.

As a maths formula, it would look like this:

By applying for an equity release loan, homeowners can access the value of their home equity to capitalise on investment opportunities or to meet a range of other financial needs.

To gain a fuller understanding of how a release of equity works, please watch this short video that explains home equity in more detail.

What Is the Purpose of an Equity Release Loan?

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The primary purpose of releasing equity is to give homeowners access to the wealth they have accumulated in their property without having to sell their home. This additional income can be used to fund renovations, cover healthcare costs, enable travel or allow for the purchase of another property or a new car.

Releasing equity offers a level of financial freedom that enables homeowners to make the most of their financial situation. This can make it easier to achieve long-term financial goals sooner.

Why Is Equity Release Growing in Popularity and Relevance?

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Home equity release has gained significant traction in Australia due to changing demographics and the economic realities of life post-COVID. With property prices soaring and the cost of living increasing, homeowners are seeking alternative ways to fund investment opportunities and lifestyle purchases.

The popularity of loans for releasing equity has risen as a growing number of Australians recognise its potential to unlock the value tied up in their homes. Additionally, improved regulations in the wake of the Banking Royal Commission have bolstered consumer confidence that this is a viable option.

What Are the Benefits of Home Equity Release?

Homeowners researching equity loans will quickly discover that there are a range of benefits to this kind of financial arrangement. These can include:
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Overall, an equity loan can provide you with the ultimate solution: financial freedom and investment opportunities, without having to sell your home.

However, as with any major financial decision, it’s important to carefully consider the terms, potential risks and long-term implications before applying to release equity.

1. Access to Funds

You’ll be able to access the equity currently tied up in your property. This can be used to finance expenses such as home renovations, vehicle purchases or out-of-pocket medical expenses.

2. Retained Ownership

You’ll retain ownership of your home, meaning you can continue living there as long as you need to.

3. Rising Property Values

With property values steadily increasing in many parts of Australia, you may have accumulated substantial equity in your property, making equity release an attractive option to leverage this wealth.

4. Flexibility

Equity loans offer a variety of payment options, from lump sum withdrawals to lines of credit. This can give you the flexibility you need to meet your financial needs.

5. Investment Opportunities

Accessing equity may allow you to diversify your investment portfolio by financing shares or property purchases. This gives you the potential to grow long-term wealth.

6. Enhanced Lifestyle

Whether it’s renovating a home, enjoying a dream vacation or purchasing a new vehicle, equity can empower you to enhance your lifestyle and fulfil your financial aspirations.

How Can ZEP Finance Help?

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Experienced Team

Our experienced team at ZEP Finance have been helping clients in the Northern Rivers region to find the best finance to suit their needs for over 15 years.
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Wide Range of Lenders

With a wide range of loan products and an extensive lending panel, our brokers can help you find a competitive loan ideal for your circumstances.
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Step-by-step Assistance

When you team up with ZEP Finance, you get assistance every step of the way, from initial consultation through to post-settlement. We’ll even do the paperwork!
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Award-Winning Expertise

Our brokers are humbled to have received a range of industry awards, including Best Regional Broker and inclusion in the Top 100 Best Brokers of 2023.

What to Consider Before Applying for a Home Equity Release

When it comes to this kind of equity loan arrangement, there are some important details that you’ll need to wrap your head around. For example, what are the long-term financial implications of accessing equity? Will you be eligible to apply for a home equity release? And will the offered loan product be suitable for your individual situation?

To ensure you get the right loan to suit your current and long-term financial needs, make sure you consult with an experienced broker before signing on the dotted line.

What Are the Financial Implications?

Accessing equity through a release loan comes with a range of financial implications, including:

Interest Costs

Borrowing against home equity incurs interest costs, which can accumulate over time, potentially increasing the overall repayment amount.

Tax Implications

The tax implications of borrowing against equity in Australia can vary. While the released funds are generally tax-free, homeowners should seek specific equity release advice from a tax professional to understand any potential tax implications.

Impact on Means-Tested Benefits

Accessing equity can affect means-tested government benefits, potentially leading to reduced entitlements. It’s crucial to understand exactly how these benefits could be impacted before proceeding.

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Consider Suitability and Eligibility

Take time to think about both the suitability of the loan and also whether or not you will meet the specific eligibility requirements. Consider the following points:

Home Value and Condition

The value and condition of the property play a role in determining eligibility and the amount of equity that can be released.

Equity Threshold

Lenders often impose minimum equity thresholds, so homeowners may need a certain amount of equity in the property before they can access it.

Income and Credit History

Applying for an equity loan may be slightly different compared to a traditional mortgage, however, income and credit history are still very important. The lender will carefully scrutinise these aspects of the application to verify the borrower’s ability to repay the loan.

Alternative Options

Homeowners can explore alternative options, such as downsizing or utilising savings to determine what best aligns with their needs.

How is an Equity Loan Processed?

There’s a specific process that needs to be followed before you can gain access to an equity loan. These steps may include:

Initial Assessment

Equity Release

Property Valuation – The process begins with a professional property valuation to determine current market value.

Financial Advice – Homeowners should seek financial advice to ensure they fully understand the loan implications.

Affordability Checks  – Lenders conduct affordability checks to ensure homeowners can meet the proposed financial obligations.

Application Process

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Application Submission – The homeowner applies for the loan through their chosen lender.

Legal Documentation and Conveyancing – These essential parts of the process help to ensure all terms and conditions are clear and transparent.

Cooling-Off Period – Homeowners may have a cooling-off period during which they can withdraw from the contract without penalty.

Releasing Funds

Funds Released – Upon loan approval, funds will be released to the homeowners, in line with the terms of the lender.

Use of Released Equity – Homeowners can use the released equity for its intended purposes (as stated in the loan application).

Safeguards and Regulations – These safeguards protect homeowners and ensure loan transparency.

Get Expert Equity Release Advice from ZEP Finance

Releasing equity can be a valuable tool for homeowners seeking to enhance their financial security and quality of life. Whether you’re considering an equity loan or other alternatives, getting expert advice is key.

At ZEP Finance, we can help ensure that you make informed decisions that align with your financial goals and aspirations. Our team of experienced professionals take the time to understand your unique needs and offer solutions tailored to your individual situation.

Contact us today and we’ll gladly help guide you through the intricacies of an equity loan.

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Frequently Asked Questions About Home Equity Release

Yes, you can leverage your home equity to finance a range of investments, including shares and property. As with any major financial decision, it’s important to assess risks and seek financial advice before committing to the investment.

The amount of equity you can release depends on factors such as your property value and loan-to-value ratio (LVR) set by the lender. Typically, borrowers can access around 80% of their LVR, but the exact amount will be determined by the individual lender.

Early repayment options vary among lenders. Some will allow early repayment without penalties, while others may impose an added fee. Make sure you review the loan terms carefully and discuss early repayment options with your lender or mortgage broker before applying.
Yes. In fact, accessing equity to fund renovations can be a cost-effective way to improve your property’s value and enhance your living space. You can use the released funds to finance a range of home renovations, including kitchen and bathroom upgrades, extensions or even a new pool.

Using your equity to consolidate high-interest debts, such as credit cards or personal loans, can be a sensible strategy to assist with debt management and reduce monthly repayments.

However, consolidating credit card debt or personal loans into a 30-year home loan could result in you paying more interest over the life of the loan. For this reason, make sure you take time to consider the long-term implications and seek professional advice to ensure debt consolidation is the best option for your financial situation.

Lenders will usually have a list of specific reasons why equity can be accessed through a loan. To qualify, you’ll need to comply with one of these acceptable purposes. While lending criteria will differ, the most commonly recognised reasons for accessing equity include:

  • Buying a second property.
  • Carrying out renovations or extensions on your existing home.
  • Purchasing a business.
  • Consolidating debt.
  • Investing in shares.
  • Purchasing a personal item, such as a new car.
  • Funding a holiday.

If you have a specific reason why you want to access equity but you’re unsure whether you would qualify, then contact the team at ZEP Finance for some free advice.

When applying for a loan to access equity, you’ll generally need to provide:

  • Proof of identity (approved photo ID, such as a driver’s licence, passport, etc.)
  • Proof of income (payslips, tax payment summaries, etc.)
  • Proof that you own the property you want to borrow against (property title)
  • Details of any existing mortgages.

You’ll also need to supply documents that verify your reason for accessing equity. For example:

  • If buying a second property, you may be asked to provide a letter from a conveyancer or a contract of sale.
  • If consolidating debt, you might need to provide recent bank statements showing regular debt payments.
  • If investing in shares, you may need a letter from a financial planner outlining your proposed investment.
  • If you’re planning a renovation, you might be asked for a proposed scope of work, along with a copy of the building contract or written quotes confirming the total cost.

Since lender criteria may vary, it’s essential to check with your preferred lender for their specific paperwork requirements.

110+ Google Reviews And Counting

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Mal RiddleMal Riddle
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04:38 05 Apr 24
I'd heartily recommend Kylie and the team at Zep for your mortgage needs.
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04:28 05 Apr 24
I'm a property investor with 6 properties thanks to this family run brokerage business. I have had nothing but exceptional service from Zep finance. They don't cross-collateralise, work closely with your accountant and are so smooth and easy to work with.Zains team consider well over 100 lenders to come up with the right loan product for investors. These guys do the hard yards and I could not recommend them more.
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01:26 05 Apr 24
Highly recommend ZEP Finance, a local family-owned business whose kindness, passion, dedication & attention to detail shines through everything they do. Exceptional humans going above and beyond!
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03:59 04 Apr 24
The team at Zep were so incredibly helpful and made buying our first home not as stressful 10/10 recommend
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06:18 02 Apr 24
The team at Zep have been amazing.We had a more difficult settlement and each of the team gave me time, clear direction each step of the way and were extremely patient.Many thanks!!!Highly recommend
23:22 25 Mar 24
Zain is absolutely fantastic. He helped us with the refinance of our first home to help us buy our dream large acreage property nearly three years ago. Coming off our fixed loans, Zain is now helping us keep our new variable rates as low as possible. He’s been of tremendous help during the process each time. Highly recommended!
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08:01 24 Mar 24
The Team at ZEP were extremely helpful from the start to finish of the entire process and even after with check ins to ensure we are on a great rate and things are going smoothly. Extremely professional, fast and go above and beyond to ensure you reach your goals. Highly recommend!
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23:19 20 Mar 24
Kylie Harris, my broker was excellent in her approach and assistance. She was clear, concise and made it an effortless, streamlined process unlike other experiences I have personally had refinancing property. I felt trust, care and guidance from her and the team upon every step, delivering a great outcome. I have since produced two more leads for her with long term friends who were equally impressed.
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23:17 20 Mar 24
Fantastic Team!! Second to none!!
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23:19 01 Mar 24
ZEP took the time to explain the home loan process to making it stress free. They were always there to help when needed, wound highly recommend Zain and the team.
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05:17 29 Feb 24
We had such a straightforward, no problems process with Zep. Communication was clear and consistent and the staff were all friendly and accomodating. Thank you!
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09:21 22 Feb 24
Zain and the team have helped us with loans, refinance and financial advice. They are unbelievable and easy to deal with. Call them now!
06:36 22 Feb 24
Zain and the team were great. All the way from initial contact to past our settlement date to make sure the whole process was smooth.Dealing with Karina and Trudy they made everything hassle-free and had great communication at all times. 11/10, highly recommend.
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22:31 13 Feb 24
We have been very happy with the service provided by Kylie and the rest of the team at ZEP finance- they've ensured a very smooth journey for our refinance and property purchase. We've already recommended them to friends and family
Matthew GordosMatthew Gordos
11:43 11 Jan 24
ZEP Finance helped us throughout the process of selling and purchasing our homes by ensuring that paperwork and communication with our finance institutions was completed under tight timeframes
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19:40 18 Dec 23
Zep finance helped us achieve what we were trying to do when no other brokers could. The whole experience was met with an extremely helpful and positive mindset with nothing ever being a problem.The addition of incredibly helpful staff made our experience with zep one that we will highly recommend to anyone looking to refinance like we did.Give Zain and the team a call, you won't be left disappointedAsh
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Great service again from zep finance.Could not recommend them highly enough.
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03:19 12 Dec 23
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23:51 05 Dec 23
Zain and the team at ZEP Finance are incredibly responsive to any questions and are genuinely customer-focused. They invest the time to get to know their clients and develop long-term relationships with them. It's comforting to know that expert advice and any assistance is only ever a phone call or email away. Over the past 5 years, I've found that they always act in the client's best interest and nothing is ever too difficult for them whether it be assisting with identifying the best lender for your needs, renewing loans or purchasing a home. They just make it happen!
Sorayah ZazuriSorayah Zazuri
04:08 14 Nov 23
Zain, Emma and the whole team at ZEP finance have done an amazing job. They successfully navigated us through our construction loan, and then onto refinancing to get us a better home loan with a reduced interest rate. We’ll done guys! You have taken a huge weight off of our shoulders. We look forward to dealing with your amazing, local, Lennox Head, family run business for any new mortgage needs!
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21:29 07 Nov 23
Zain and his team are friendly, efficient and professional. We have used ZEP’s services on a few occasions and I can not speak highly enough of them. They are patient and understanding and go above and beyond any expectations you may have. No hesitation in giving 5 stars plus…. Your emergency is their urgency. Fast and easy.
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Highly recommend using ZEP Finance they made the process of getting finance easy and completed the process quickly and efficiently.
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03:34 10 Oct 23
Zain and the team at ZEP Finance came recommended when we started looking at buying near Lennox and needed financing. Zain was able to assist us in getting the best solution for our mortgage. The team was incredibly attentive, responsive with any queries we had along the way and professional. They made the process seem as seamless as can be considering the current lending context. A big thank you Zain, Trudy and Kelly for your expertise and support, we will certainly recommend your services.
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06:45 01 Sep 23
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We were recommended Zep Finance by friends of ours. Zain, Emma and the team met and exceeded our expectations and we couldn’t recommend highly enough. This was our first home loan experience and their communication was always prompt and clearly explained which made the whole process as straightforward as possible for us. Thanks so much for your perseverance and dedication to finding a home loan solution for us guys, really appreciated!
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00:12 25 Jul 23
Fantastic service once again! We've used Zain and the team from ZEP Finance for our past mortgages and recently to extend our current home loan to get some renovations done. Zain and his team was excellent at communication and did everything in a timely manner. Highly recommend and will definitely use them again in the future.
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Zep finance is truly amazing and will help you achieve the best result. As a first home buyer, I am not sure about the process but my broker Kylie and Karina have always been very helpful, always kept me informed throughout the process and went above and beyond to assist until it is all completed. It was an amazing experience I couldn’t have done it without ZEP Finance !!!
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04:30 10 May 23
Zain and the ZEP team helped us get our initial home loan in 2019 and have just assisted us with refinancing. Great team, happy to answer all questions and a smooth process. Would recommend to anyone, near and far - we work with team from Western Brisbane without any dramas!
Jean BarrJean Barr
10:40 19 Apr 23
Made it easy for me to get my house loan. The staff were all very professional and made the whole process much easier and smoother. I would never have been able to settle on my purchase so quickly had I not had the team behind me. Everything was clearly explained to me. They took the stress out of the whole process.
Pip CPip C
10:24 19 Apr 23
Zain and his team did a wonderful job securing me a home loan and helping me understand the steps involved. They communicated with all the necessary parties on my behalf and l couldn't have been happier with the work they did for me. I highly recommend ZEP finances. Many thanks Zain, Kylie, Lisa and all the team.From a happy first home owner!
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08:32 30 Mar 23
Zep Finance are world class! This was my 6th mortgage and by far the best advice and all round service I've ever experienced. Kylie went above and beyond to find me the best deal, with Trudy, Emma, Jasmine and Caitlin keeping me informed along the way. Thanks ZEP! I really appreciate the great loan you negotiated.Highly recommend this team!
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01:23 28 Jan 23
Amazing experience for first home purchaseZEP Finance we’re excellent in making our fist home buying experience simple. Our broker, Joel, provided an awesome experience when purchasing our very first home and wer were able to purchase the home of our dreams. Throughout the whole process, Joel always communicated with us clearly and answered any questions we had, making sure we understood. Thank you to Joel and ZEP finance for providing us with a great experience and we will be sure to return when we need a broker in the future.
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22:20 27 Dec 22
The team at ZEP Finance were very professional throughout the whole loan process and provided us with several options that suited our circumstances. Not living local was not an issue for them and the communication provided from the ZEP team was amazing. If you are looking for a service which is tailored to your specific needs we highly recommend reaching out to Zain and his team. Thanks for helping us achieve another milestone in our lives.
So grateful for Zep Finance.There are few words that can explain our gratitute to Zain and Joel.The brokerage service was excellent from beginning to end in assisting us to secure our very first home.Zain and Joel made us feel valued and informed each and every step of the way on our journey to owning our own home.We can't thank them enough for their exceptional, meticulous, professional and efficent assistance and support.If you are looking for a broker, we can absolutely recommend Zep Finance and will continue to use their services in the future!From the Myburghs.
Abbey McBurneyAbbey McBurney
23:37 20 Oct 22
Third time - Still Amazing ServiceThis was our third time working with ZEP Finance. The whole team supported us through a very difficult process negotiating with our previous lender following the February/March floods. We would have been lost without their support.They then switched gears and sprung into action to get us locked and loaded to buy a new, flood free home.Joel helped us obtain pre-approval with our preferred lender and the whole process from exploring options to pre approval to settlement was seamless and stress free.Zain has built a quality and caring team, whose attention to detail and customer service is hands down second to none.I have always, and will continue to recommend ZEP to anyone looking into finance options.
The Image CollectiveThe Image Collective
05:22 04 Oct 22
Highly recommend the entire team at ZEP to anyone needing finance information or services. The results were nothing short of amazing. This experience for me has restored my reservations about loans/finance with their professionalism and knowledge. I understood everything that was explained, was given options and felt so empowered to leave my long term bank.I have since referred family and friends to see them and hope anyone reading this gives them a go. Trust me, you won't be disappointed. THANK YOU ZEP!!!
Nat DaleyNat Daley
00:18 02 Aug 22
Second to noneOver many years and many transactions, Zain Peart and his team (Kylie, thank you) have always been great, but this time they went above and beyond. Our situation is complex, the investment property transaction we just executed was complex, and what was even more complex was the timing of the transaction (floods, COVID-19, interest rate increases, maternity leave, personal matters etc). ZEP provided much needed stability in these uncertain times. There is nothing that office cannot do, and it seems the more complex the scenario the more they stand out. I cannot recommend ZEP highly enough, and do to my family, friends and clients 100% of the time.
Wan BradridgeWan Bradridge
10:06 11 Jul 22
Amazing service! Zain, Kylie and the team went above and beyond for us. They made the process so easy. They did all the hard part for us, we didn’t even have to lift a finger! Always keeping us up to date with the progress of the loan application, very professional and friendly. We would recommend the team to anyone! Thank you guys! Craig and Wan
10:03 11 Jul 22
I couldn't have asked for better service! Zain, Jasmine, Emma and the entire team at ZEP worked around the clock to find the best possible loan for my situation.If you're looking for a professional, timely, considerate and understanding broker, ZEP is my recommendation. Jasmine always replied to my requests quickly and efficiently and Zain worked tiressly to find the product just for me.
Sally CookSally Cook
10:02 17 May 22
PROFESSIONALSERVICE AND GREAT COMMUNICATION !!Zain, Joel and his team were extremely helpful, responsive and gave us excellent advice throughout the process of obtaining our loan and securing a home in this difficult property market. Their service was sincere and supportive and we would highly recommend to anyone to use their services. We will most definitely reach out to them once again for any further loan applications. These guys made it all happen !!! THANKS HEAPS
Helen WoodburnHelen Woodburn
00:55 15 Jan 22
Buying and selling property can be stressful so having someone assist us with our financing towards the selling and buying of a property was very important to us. Zain at ZEP Finance came highly recommended. Both Zain and his team did an incredible, efficient and professional job from start to finish. Zain's knowledge and experience is exceptional which instilled our confidence and trust. The team's communication was outstanding and their timely and prompt attention to detail provided comfort and peace of mind throughout the process. This meant we could focus on other necessities associated with moving house as well as saving us a heap of time. We would highly recommend Zain and ZEP Finance to anyone requiring a mortgage broker.