When it comes to buying a property abroad, you may be asking yourself a few questions around exchanging your funds. How you can to send the money, why you should be using a currency specialist the money and when you should be transferring the funds.
The HOW, the WHY and the WHEN
Now, let’s take a look at how to exchange your funds. When purchasing a property abroad, you will be exposed to a large money transfer. If you are looking to move to France and purchase Euros with Pounds, you will need to be keeping a beady eye on the exchange rate throughout the process. You will also need to know where you will be paying this to and when is the best time to do so. Using a currency specialist will broaden your horizons to the options available to you, simplifying the process and stretching your budget.
For many this may be a first time experience and having to transfer funds of this size may cause some uncertainty and additional apprehension when it comes to the unfamiliar world of currency exchange. This brings us on to the why. Why should you use a currency specialist? There is often a negative connotation around currency exchange, unjustified, as their sole business is to save you money on your exchange rate and provide you an option other than your bank that is just as secure and much more competitive, potentially saving you thousands on your exchange rate.
Why you should be using a Currency Specialist
There are many benefits to setting up an account with a currency exchange specialist such as FrenchEntrée’s trusted partner, Moneycorp. Here’s just a few benefits;
Competitive exchange rates
With currency being their sole business, they have the accessibility to a panel of liquidity providers, offering them very competitive rates of exchange. This therefore allows them to offer their customers a very attractive rate of exchange.
Planning and Expertise
Currency specialist not only offer you a competitive rate but also different planning methods to plan for your transfer. With 75% of the private client currency market being made up of property buyers, the currency specialist have extensive experience in this field, supporting expats and holiday home buyers throughout their purchase. With the purchase of a property, you know your budget well in advance and so have time to plan to make the most of your funds.
Currency specialist offer different tools to help you to plan ahead, remove risk and maximise your budget to its full potential. Please see “currency tools” below for a full overview.
Ease and Speed
Currency specialists are quick to adapt to technology advancements to ensure they stay competitive in the market. With the old school feel of security from speaking with somebody over the phone, to the new era of online payment platforms, they cater for all preferences, with slick and speedy systems making your payments instantaneous. While some banks do have similar transfer options available, making a regular overseas transfer from your personal bank account is likely to take far longer, and you will most likely be subject to charges to.
Moneycorp are regulated by the Financial Conduct Authority (FCA) meaning they are required to safeguard customer funds into segregated client accounts, making them as secure as using your bank.
Finally, your biggest concern may be around navigating the ever changing exchange rate. When to exchange can be an impossible questions to answer, however the currency specialists expertise will help to guide you towards an appropriate time to maximise your budget and reduce your risk.
When to transfer you funds: Currency tools
Planning ahead is the key to securing the best rate on your currency exchange transactions. You might not be able to control the exchange rates but there are plenty of ways to protect yourself against fluctuations. Below are some of the options a currency specialist will provide you with.
A spot contract is the current market price for changing one currency directly for another for immediate delivery, as opposed to a date in the future. This is the best way to seize the opportunity when exchange rates swing in your favour and your transfer will be made immediately.
Relying on a spot contract for a property purchase could be risky, however, as you’ll be tied to the current rate when you need to make your transfer.
Forward contracts allow you to take advantage of a favourable exchange by fixing the exchange rate for a date in the future. Once you agree a rate of exchange, you can lock this in for up to a two year period. Whenever you wish to transfer the funds, whether you have a completion date on property in a few months’ time, your transfer will be made with the fixed rate you had agreed originally, regardless of the current rate. A forward contract also doesn’t require you to make the payment in full, you will only need to provide a 10% deposit to lock in the rate.
This is a popular choice for property buyers as it fixes your budget and removes the risk of fluctuating exchange rates affecting your budget. This is very beneficial for those working towards a budget, however, bear in mind you will not be able to take advantage of an improved rate.
Rate Tracking and Market Orders
If you have a more flexible timeline or budget, you can set up a market order to track a rate. You decide the exchange rate you would be happy with and when the rate is reached, your funds will be automatically purchased for you. You can also set a stop limit order, preventing you from moving out of budget if the exchange rate is to fall below a certain point, again transferring your funds automatically.
Regular Payment Plans
Regular payment plans are ideal if you have monthly bills or mortgage repayments to pay, or are receiving income or a pension from overseas. Making automatic transfers takes all the hassle out of making payments and there are also options to fix the exchange rate for extra security over the payment amounts.
With a Platinum Trusted Service Award 2020 from independent review site Feefo and 40 years of experience in the industry, FrenchEntree 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 FrenchEntree 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 FrenchEntree there are no transfer fees in any payment.
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