When you buy a property in Spain
or Cyprus, you will know the price of the property
in Euros or Cypriot Pounds but you will not know
the actual cost until you buy all of the currency
to pay for it.
This means that the property
could either cost you more than you had planned (if
the Euro/CYP£ strengthens)
or the property could become cheaper (if Sterling
strengthens).
Recently Sterling has fluctuated significantly
against
the Euro and CYP£ within a matter of
months, so this does deserve careful consideration.
On the basis that you are buying a property and not
speculating on the currency markets, it is worth
fixing the exchange rate for all of your future stage
payments.
There are several ways of doing this.
Buy all of the currency now on a "spot
contract"
Hold the currency on deposit
and send payments when they are due from your foreign
currency account.
To do this you need to have full funds available.
Buy as much currency as you can afford now
and reserve an exchange rate for the remaining
payments
To reserve
an exchange rate you need to buy a 'forward currency
contract'. In effect you are buying currency now
but paying at a later date when you have the funds
available.
The exchange rate that you achieve on a "forward
contract" is not quite as good as that for a "spot
contract" but it does guarantee that you know
the cost of the property. You will be required to
pay 10% of the value immediately and the balance
by the date that you have reserved the currency for.
Use a specialist currency broker
Gascoignes International use Moneycorp Foreign Exchange
for their own currency transactions and suggest that
you do.
Moneycorp specialize in helping private clients
buy currency for overseas property purchases.
They are able to suggest the best possible solution
for your particular circumstances, more often at
more competitive rates than your own Bank and will
provide you with a efficient friendly and individual
service in plain English.
Currency Converter
Use this convenient tool for your assistance
on converting Overseas prices to Sterling.
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