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Maximising the price you acheive when selling a property abroad or getting a bargain when buying is not the only factor to consider when moving home. Property transactions are also affected by timing and the affect of exchange rates which change day-to-day and often minute-to-minute. There are steps you can take to limit the impact of exchange rates when makinhg a large money transfer such as buying and selling a property overseas. These include waiting for the right time to transfer money, using a forward Contracts.

FREE information for exchange rates, money transfers and owning a property abroad

You can receive FREE daily updates from OFX and moneycorp. After you have set up your account online they will also provide you with telephone advice regarding the likely direction of the exchange rate you are dealing in.

UK mortgage or overseas mortgage for overseas property?

You will find it difficult to find a UK mortgage broker offering to arrange a mortgage for a property abroad. Therefore your best option is to search for a property mortgage broker in the country you are buying the property within. The added benefit is they will also have local knowledge and do the proper checks on the property you are buying before they allow you to sign up to their mortgage. Another factor to consider is if you are planning to let your property, if your mortgage is in, for example, the UK (in British Pounds) and your tenants pay you in the local currency then your property rental income and mortgage repayments would differ each month due to the changing exchange rate. Having the mortgage agreement and rental income in the same country means you will be dealing in the same currency.

Forward Contracts to limit exchange rate risk

A forward contract is used to lock in today's exchange rate for a transaction at a date in the future. This can be ideal when purchasing a property abroad because it can take time to search for a property abroad. For example, if you plan to buy a property within 6 months and are happy with the current exchange rate simply enter a forward contract and when you have found your property you will know with certainty the cost of the property. If you had not entered into a forward contract and the exchange rate changes not in your favour then you will have to pay more for the same property. OFX and moneycorp both provide money transfers with forward contracts.

Can I remortgage to get the money to pay for a property abroad?

Yes. You could release some equity from your current property to finance the purchase of a property abroad. Speak to your current mortgage provider to explain your situation and they will provide guidance.

Maintenance costs

Many people extend, renovate and add features such as swimming pools to their property abroad. If you are renting out your property abroad you will have cleaning costs. If you plan to carry out these jobs yourself you can save a lot of money. However, if you are paying for the work to be done this can get very costly and may require paying workers in a foreign currency. If you plan to make regular payments in a foreign currency a money transfer company such as OFX or moneycorp will provide the best exchange rates frequently to you.

Compare mortgage lenders

Compare mortgage lenders in the local country before proceeding. Mortgage deals can differ considerably in all countries around the world. Make sure you are happy that other providers are less suitable before agreeing upon which mortgage lender to use.