Purchasing a property abroad adds the additional obstacle of currency exchange to the purchase process. This in fact may be one of the defining factors of your budget as due to fluctuations in the market between the currencies you hold and the Euro can move the amount you will need to pay in different directions depending on the value of the Euro.
Have surety over your payments
If you are looking to purchase a property with a definitive strict budget, that is not negotiable, you will want to ensure you have some certainty over how much you will need to pay from the beginning of your property journey. If you have a budget of, as an example, £250,000 in order to buy a home in France and the current GBP/EUR exchange rate is 1.166, then you will be able to afford a home worth €291,000.
If you find your desired home worth €290,000, however the exchange rate dropped to GBP/EUR 1.150, your £250,000 budget will now only be worth €287,500 meaning you will no longer be able to afford that home.
This is where the tools and expertise of a currency specialist may come in handy when buying a property in France.
What do currency specialists offer?
Foreign exchange specialist companies –such as Moneycorp– work with buyers through the whole journey. They offer free guidance and a variety of bespoke solutions to exchange your funds depending on your circumstances.
So for instance, if you are working with a tight budget and need to ensure you have certainty over your purchase price, you might benefit of the possibility to fix the exchange rate as soon as the price is agreed via a forward contract. This would mean if you were due to complete in 3 months time however the current exchange rate means you are within your budget, you can lock in your €290,000 Euros today for a date in the future (Forward contracts may require a 10% deposit). This will protect your budget from negative fluctuations meaning you can no longer afford your property.
Alternatively, for those with the appetite and the time, you can try to target an improved rate of exchange via a market order. This will allow you to agree a rate you would like to achieve, and if reached within your timeframe, your funds will be automatically exchanged at this rate.
Finally, a foreign exchange specialist will be able to offer you a competitive rate of exchange, saving you money regardless of where the market is at the time, and some -like Moneycorp– will not charge a transaction fee for transferring the funds.
When shall I get in contact with a foreign exchange specialist?
You should get some guidance on the market as early in the process as possible as the exchange rates should be an element of your budget. Make sure you open a free account before you start inspecting properties either virtually or by travelling to France. If you find a property you can act quickly and if you don’t you can keep your account opened –at no cost or obligation- and benefit of market updates and the help of a market specialist.
With a Platinum Trusted Service Award 2020 from independent review site Feefo and 40 years of experience in the industry, FrenchEntrée has been recommending Moneycorp for more than 15 years. During this time they have helped thousands of client planning the best way to pay for their property as well as supporting them afterwards with any further payment from paying bills, mortgages to repatriating UK pension payments for those who have retired to France.
Furthermore, we have worked with the same person at Moneycorp for more than a decade! You might be familiar with her as she often writes for our French Property News magazine. She has 13 years’ experience in foreign exchange, and is a qualified European lawyer with experience in European transactions. Mar will be happy to answer any questions or enquiries to support you through these difficult times
Opening an account is really easy and free of cost. You can register online or over the phone in a couple of minutes and for FrenchEntrée readers there are no transfer fees in any payment.
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