When fantasising about your overseas property, you will probably visualise a Tuscan villa in the heart of Florence, or listening to the sound of lapping waves on the Costa del Sol….the chances of considering how you intend to transfer your money abroad are probably very slim. No one likes to think of the boring and mundane aspects of a new adventure, such as how to pay for an overseas property, but let’s face it, you will have to come to terms with the prospect at some point. And actually, it’s a good idea to plan in advance, because it will save you a substantial amount of money.
So how do you go about it? Well there are several ways to maximise the value of your international money transfer and using a specialist foreign exchange company can help you do this.
These 5 points will make sure you get the most bang for your buck and ensure a smooth and unnecessarily expensive overseas property purchase.
Pay for an overseas property with a specialist currency company
Whether you are buying overseas property in France or Spain, your first instinct will typically be to take a trip to your bank, convert your money to the desired currency and let them transfer to your chosen destination. Unfortunately this is the first mistake people make when buying overseas property. Banks are great for organising your assets within a country, but will charge you extortionate fees internationally, without you even being aware.
Seeking the advice of a specialist foreign exchange company will ensure that they offer you rates from as low as 0.5% mark-ups, which is a considerable saving from rates of up to 5% from the banks. When interpreting these percentage differences in terms of property prices, you will notice the difference when you save thousands of pounds on your property. Using a specialist currency company can save you in real money terms, £3000 on every £100,000 you send abroad.
Not only will specialist brokers save you a lot of money but they will also transfer the money to a bank or third party abroad, typically using the SWIFT network which will usually arrive at your chosen destination within a matter of hours.
The benefits of a forward contract
Most individuals paying for an overseas property don’t keep a close eye on the currency markets. However, when buying overseas property, this is good practise to ensure that the price of your property doesn’t escalate, and worse still, become unaffordable. Once you are familiar with the rates (perhaps with the help of a currency broker watching the market on your behalf), you can book a forward contract that will fix the price of the property so that you don’t have to be concerned with fluctuating rates. Rates can shift up to 10% within a day, which can see prices soar, so this is a handy currency contract when saving money on your property.
Seek your broker’s opinion
Your currency broker may not be a financial advisor, however they will be likely to have years of experience and knowledge of how the markets move and will usually be able to share their knowledge with you. Though they cannot predict future changes to the exchange rates, brokers will be able to provide their judgement which will be more informed than yours, so do seek their expertise, after all, it is their job!
Ensure your money is protected
In the same way that you would want to put your money somewhere safe at home, you will want to make sure that it is safe with a non-bank foreign exchange specialist when it comes to transferring it from one country to the other. You can be almost certain that your funds are in safe and good hands if the broker is registered under the Financial Conduct Authority (FCA) and HM Revenue and Customs. If you aren’t sure, check your broker’s website as this information will usually be listed on their homepage, if not, reconsider! Comparison websites such as MyCurrencyTransfer.com only list FCA regulated currency brokers to make life easier for you.
Plan ahead
Buying your property will most likely not be the end of transferring money across borders. Expenses such as bills, maintenance and administration are likely to become regular outgoings and so you will want a currency broker close at hand. Establishing a good relationship with a broker from the beginning will ensure that you feel comfortable going back to them time again.
Good luck!
