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Banking and Finance  » How to Save Money on your Overseas Property Purchase

How to Save Money on your Overseas Property Purchase

Have you considered using a Foreign Exchange Specialist ? Many

people are unaware of, or neglect the importance that exchange

rates have on the cost of their overseas property and the

currency risk that is associated with an overseas purchase. If

you're emigrating or buying a holiday home abroad, you are

likely to transfer money into a foreign currency. This needs

serious planning, especially if you are buying a new development

'off plan' where you are required to make several 'stage

payments' during the construction of your property. We therefore

highly recommend the use of a specialist foreign exchange

company who offer services such as these:

Travel Money -- by using a foreign exchange agent you can get

better rates than your bank or travel agent & zero commission

charges. You can also have the convenience of the currency being

delivered free to your home or place of work or if you prefer

you can choose to collect from major airports or railway

stations. Off-shore accounts -- Having an off-shore account can

be beneficial for a number of reasons. As a frequent traveler it

can be convenient and economical to hold an account in the

currency of your destination. Bureau de Change and credit cards

both charge chunky premiums or commission. So, if you know

you'll be spending considerable time abroad, why not transfer a

lump sum in advance and take advantage of savings on the

currency conversion? With today's fluctuating exchange rates, it

can be prudent to hold a number of different currency accounts

to protect your assets from global market variations. Offshore

banking havens can offer high earners and investors low or

no-tax environments in which to deposit savings for attractive

rates of interest. Instructing your agent to exchange and

transfer your money into such saving accounts can help you to

avoid tax and, effectively, stop the bank from pocketing your

hard earned money! Mortgages -- Need to re-mortgage in the UK to

"top up" your overseas finance? Are you unsure about the pros

and cons of Sterling vs. currency mortgages? If you're looking

to finance an overseas property, ask your foreign currency agent

who works with selected mortgage brokers to bring you a mortgage

suitably packaged for your maximum convenience and minimum cost

. Spot Contracts-- the most basic and popular foreign exchange

product is an agreement to buy or sell one currency in exchange

for another. You settle the contract the same day, at a price

based on the current value of one currency compared to another

-- the "spot exchange rate". Spot exchange rate movements are

highly unpredictable however, even during a single trading day.

Relying on the spot market for future foreign exchange is highly

speculative. Forward Contracts -- let you "buy now-pay later"

yet fix the rate in advance and thus avoid the risk of the

exchange rate moving against you. Between June 20th and July

20th 2005 for example, the Sterling Euro rate fell from 1.50 to

1.43. If you had booked a forward contract in June, you would

still have been able to buy at or near 1.50. If you had been

buying a property for 200,000 Euros you would have saved

yourself around £6,500 ! A foreign currency agent has specialist

knowledge & can monitor the financial markets on your behalf,

advising you & notifying you of any changes that may affect your

situation. If you use a foreign exchange specialist at the start

of your property buying or emigration process, they will have

the greatest chance to find and guarantee the best rates in your

required time frame. Their up-to-the-second trading facilities

will allow you to trade or fix the exchange rate on your

purchase at the most opportune time, saving you money. This is

in contrast to mainstream banks and financial institutions who

quote only daily rates and charge a premium fee. We asked a

question of 3 major foreign exchange specialists. Only two of

them responded & their answers are shown below.

We have not yet used either of these companies so can make no

recommendations. However, from our research we are confident you

will receive an efficient service & have the potential to save

some serious money should you choose to use one of them. Your

feedback is essential to help us to provide you with links to

only the best resources. We therefore welcome your positive &

negative experiences of foreign currency agents. Question:

Please tell us who you think your closest competitors are & how

you differentiate yourselves from them and / or are better than

them ? World First -- "HIFX and, Currencies Direct are probably

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the 2 competitors we most often are competed against. Relative

to our competitors, we believe that we offer a more friendly

service than them. Clients often say that our salespeople were

the most approachable, least aggressive and most helpful. Unlike

our competitors we offer very low deposit rates. 1 month

deposits are just 3%. We believe we offer better rates than our

competitors and our "Best Price Guarantee" means we'll guarantee

to beat any other verifiable currency companies' quotes. We also

offer Foreign Currency Delivered direct to your door with no

commission or delivery fee." HIFX -- "Our competition:

Moneycorp, Currencies Direct, Travelex. We make no charges for

sending funds abroad & guarantee that clients will not be

charged a receipt fee. We have direct access to SWIFT for faster

payment transfers & our Regular Payments Abroad (RPA) service

can save clients £300 p/a in transfers alone. Our analysts are

consistently ranked within the top 5 global banks and brokers

for their US Dollar forecasting & HIFX was featured in the

Virgin Atlantic Sunday Times 'fastrack' 100 for 2 years running

as well as being featured in the Sunday Times 100 best companies

to work for in 2005. We are founder members of the new overseas

property regulatory body, AIPP & our sister company HIFX

Insurance Services Ltd is authorised and regulated by the FSA.

Most importantly, our staff are friendly, helpful and happy to

answer any question or worry you may have." Remember: You would

never agree to buy a property in your country of residence if

you did not know how much it was going to cost; if you agree to

buy an overseas property without fixing the exchange rate at the

outset, you are taking a gamble.

About the author:

Pete Adams of Moving Overseas

Guide has published a website to help people moving

abroad.

The site provides information & resources including Immigration

Visa's, Overseas Property Advice, Employment Abroad, Starting a

Business, Climate, Taxes & Removal Costs. Visit www.moving-overseas-g

uide.com to find out more