Buying a property in France can be a great adventure! The icing on the cake? The USD/EUR exchange rate has become increasingly attractive creating a great opportunity to maximise your budget on a fabulous French property.
Buying a property in France exposes you to multiple payments, from paying the deposit and notaire’s fees to maintenance and mortgage payments. With residence and your funds in another country, paying these aren’t as straight forward due to the added element of currency exchange. However, managed well foreign exchange can maximise your property budget!
A property in France with a price tag of €500,000 last year -2nd October- would have cost you $581,395. A year later the cost has dropped to $494.560, a saving of nearly $87,000! The reason behind this difference? The exchange rate for USD-EUR which reached 1.0428 in September this year, the highest in the history of both currencies!
What can you do to manage the foreign exchange element when buying in France?
High street banks and online only platforms often miss an important element which is key on the process of exchanging your funds – timing. Having access to the right guidance on the market and the tools to help plan your purchase is vital. This is one of the main advantages of using a foreign exchange specialist such as Moneycorp.
Moneycorp treats each customer as a unique individual and with this in mind each account is assigned to a personal dealer who will discuss the specific circumstances with the client (budget, timeline, personal situations…) in order to guide them on the time and best way to exchange the funds from the deposit to the completion, and even post-purchase.
With a foreign exchange specialist you would have instant access to a variety of tools to help you plan to make the most of your money. So you could potentially lock the rate of exchange ahead of a future payment via a forward contract or even target an improve rate via a market order.
As we have mentioned above, the USD has clearly gained a position of strength against the EUR which makes a forward contract a very attractive tool for property buyers.
Aside of this there are a few things that American clients need to consider:
- US banks are among the worst when it comes to offering competitive rates of exchange. Unfortunately a lack of understanding on the exchange rate by many US customers allows banks to offer poor rates of exchange with little push back by customers, simply due to a lack of knowledge.
- US banks also realize that most American’s are less likely to have heard or have used a foreign exchange broker in the past, so customers feel like the US banks are the only option.
- Banks charge fees. It is not uncommon for a US bank to charge between $50-$100 to send an international wire, but don’t be fooled, this is the fee that’s transparent to their customers. The big profits are made on the actual exchange rate margins which they are making on these currency conversions.
When shall I get in contact with a foreign exchange specialist?
You should get some guidance on the market early in the process 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 as you are already setup. If you don’t you can keep your account opened –at no cost or obligation- and benefit from market updates and the help of a market specialist.
Want to know more about buying property in France as an American?
In the next free webinar FrenchEntrée Digital Editor Zoe Smith, will be joined by a panel of experts to share their advice and answer your most frequently asked questions on the French property market, foreign currency exchange, and tax issues that specifically apply to buyers from the United States. Kelly Cutchin, head of Moneycorp’s USA office, will help you understand your currency exchange and transfer options, ensuring you get the best deal, avoid unnecessary fees, and make the most of favorable exchange rates.
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.
And if you a resident in the USA, Moneycorp has an office there headed by Kelly Cutchin. Like Mar, Kelly has been at Moneycorp for more than a decade helping American clients dealing with their international payments. Kelly was recently in France delivering a seminar for Americans moving to France and she will be sharing her knowledge with us on the next FrenchEntrée seminar. Click here to see more details about how to join the seminar.
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.
Contact Moneycorp at +44 20 3773 6355 or on +1 407 352 5890 if you are in America. Send your enquires to Mar at [email protected]
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