How to Be Prepared for Your Viewing Trip to France
With the good weather approaching, some of you might be planning to visit France to view potential properties. Moneycorp can talk to you about the things you need to consider before and after your trip to make sure your property budget isn’t negatively affected by the exchange rate fluctuations.
In the early stages of your property search, most buyers will be scheduling trips to assess the area and see some properties in the flesh. At this point, it is important to be prepared so that it doesn’t become an unduly stressful process as you move forward.
Determining your budget should be the first thing you tick off your checklist. Understanding what you’re working with will help you define the areas you can afford to buy in, the types of property that fit within your budget, and the payment options available to you.
Remember, if you are buying in France, you will need to pay for the property in Euros. And that means if you don’t have the currency already, you must exchange your funds to make all the payments involved in the transaction. It sounds obvious, but this part of the process is often forgotten or left for the last minute.
This is particularly important for buyers with a fixed budget, as they need to consider the impact the exchange rate could have. Rates fluctuate by the second and are heavily affected by political, economic, and global events. This means your exchange rate could have moved significantly in the time between beginning your search and the point of completion on a property.
For this reason, it may be worth getting familiar with the exchange rate before travelling to France to give you an indication of how much your budget is really worth.
It is also a good idea to open an account with a foreign exchange specialist like Moneycorp ahead of your trip. There is no cost or obligation, and you will be allocated an account manager to help you with market information and give you guidance on the tools available to help you manage your budget. Furthermore, if you find a property and put in an offer, you have a direct line to your account manager to immediately check the price in pounds and make a plan to complete your purchase.
How to manage the risk created by the exchange rates if you find a property?
With 2-3 months between your deposit and when your final payment is due, this time can be unsettling for buyers because exchange rates can fluctuate significantly.
Fluctuations in the exchange rate are rather like the weather – especially in the UK! You may have a rough idea of what’s to come, but you can’t control it, and anything could happen in the space of a few hours. Like the weather, however, you can plan for all eventualities.
That doesn’t mean the equivalent of packing your umbrella and some sun cream every time you go outside, but it does mean weighing up your alternatives and your preferences to make the right decision depending on your requirements, budget, and your attitude to risk.
How you decide to manage that risk depends mainly on your budget and how sensitive you are to potential market fluctuations.
For those more risk-averse, one option could be fixing the rate before the final payment is due using a forward contract. This allows you to lock in the rate as soon as you sign the compromise de vente and have committed to the full property price.
By doing this, you have the certainty of knowing the exact price you are paying for the property, removing any risk created by the potential fluctuations of the exchange rate.
For those with a little higher risk appetite, Moneycorp can help you track or even target a specific rate by using a market order. With this tool, you can automatically buy your euros when your desired rate is hit. You can also set a stop loss order which will trigger the same automatic purchase of funds and prevent the impact of a significant negative sway in the market. This is why it is essential to know your budget beforehand, as you can set the stop loss order to activate when the exchange rate moves outside of your maximum value purchase price.
Ultimately, the earlier you begin to plan, the easier and potentially cheaper the process will be when purchasing your home abroad. French Entrée members receive free currency transfers from Moneycorp for life, so we can help you every step of the way, online or over the phone. From the initial viewings to purchasing and maintaining the property with our Regular Payment Plan, Moneycorp can help you make your dream of a home in France a reality.
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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