Do you want to buy a property abroad? You’re not alone. Around 35,000 Brits buy a second home overseas each year, whether it’s as a holiday home, rental investment or somewhere to retire or relocate to – or indeed a combination of all three.
The reality is, though, that many more people would love to take the plunge but don’t know where to start. After all, it can be intimidating transferring large sums of money into another currency and committing to a foreign mortgage, often in an unfamiliar language.
But with the right advice and expert guidance, getting a foreign mortgage is not as complicated or scary as you might think and currency exchange doesn’t have to be stressful or expensive. Here we’ll explain the different options for transferring your currency and using it effectively to buy the property you want.
And if you have any questions, or want to talk to an experienced and dedicated currency specialist, we’re only ever a phone call or email away on 0207 151 4832 and firstname.lastname@example.org.
In a word, yes. It’s important to decide exactly what you want the property for and then make the best buying decision based on that information. Do you want a mortgage or are you a cash buyer? Do you know what your budget will get you or what extras you could get by stretching it a bit? It’s a big investment, so doing your due diligence and researching the markets properly is a crucial first step.
If you’re buying somewhere as a holiday home or investment (or most likely a mix of the two), you’ll have different expectations and requirements than if you were buying a retirement home. Adding a mortgage to your down payment can give your budget the flexibility to include properties you may have thought out of reach, but which can give you a far better yield on your investment.
For example, adding a £50,000 mortgage to your buying price could put you closer to that key attraction – the beach, golf course or city centre – and mean you can charge higher rental prices to a wider range of renters. This can also help cover the inevitable ongoing costs an overseas property brings with it, from general upkeep to employing a local property manager to look after it in your absence.
If you’re retiring overseas permanently, it’s much more likely you won’t want a mortgage and so will be paying in cash. Depending on your personal circumstances, that may or may not mean you can buy your dream home – but if not, you still have options. Start with finding out if you can get a mortgage and if you can, work out the cost-to-reward implications to see if it’s worth it and if your pension or potential rental income, for example, would be enough to cover the repayments and make it worthwhile.
Currency fluctuations can be the one of the biggest factors to think about when buying abroad. Even a small change in the exchange rate can have a big impact on the value of the property you’re buying and make it, or your foreign currency mortgage payments, quickly unaffordable.
As with everything in life, there are costs that may not be immediately obvious so it’s important to research thoroughly – have you considered everyone and everything, from the lawyer to the broker? And of course, you should check the tax you may be liable for – both in the UK and the country you’re buying in.
Taking independent advice from the right people at the right stages will help you avoid nasty surprises later in the process, such as making sure your paperwork is all in order and having the necessary licences and permits for any business elements, and the right planning consents if you’re building a new property.
Leveraging the mortgage on your UK home to buy overseas is a risky proposition. If, worst case scenario, something does go wrong with your new property abroad and it leaves you in debt, that debt could put your home at risk. We’d never recommend it but if it’s your only option, be sure to speak to an international mortgage specialist first.
Foreign exchange can be confusing and intimidating, but is absolutely integral to making sure you maximise your overseas investment – whether you’re buying to make money or live the good life. Clear Currency has spent years working with people to make the best decisions, from once in a lifetime retirement buys to setting up overseas investment portfolios.
Our currency specialists can help maximise your mortgage currency exchanges to reduce your risk and save you money so you have more to spend on the things that count.
Most of the time when you’re buying holiday currency you’ll just do a quick exchange at the bank or post office, but when the amount you’re exchanging increases significantly you need to take a more practical approach and plan for currency risk.
Fluctuations in exchange rates may make little difference when you’re buying a few hundred euros for holiday spending but when it’s a few hundred thousand euros, small changes can have a big impact – sometimes big enough to scupper the entire purchase.
“Very helpful, efficient and took the time to explain the process to me very clearly. The transfer was stress free and completed within a few days, I will certainly be recommending your services to friends and colleagues.”Kathryn
It’s inevitable with something as complicated as buying a property abroad that you’re going to engage the services of different professionals, so it’s crucial to make sure they’re good at what they do. No matter who you use, always make sure they’re independent, correctly accredited, have a good reputation and know the market you’re buying in:
It’s unlikely you’ll find a property yourself without the help of a local estate agent, but even if you do they can still be invaluable. As well as knowing the local market and what’s available, they can give you up-to-date information on property prices, rental values and even physically show you around. They’ll help you with all things local for the duration of the process and as an added bonus, can likely refer reliable local services like builders if you need them.
A lawyer is a necessary part of the buying process, so make sure they’re fluent in both English and the local language and have good knowledge and experience of property law in that country – and how it relates to non-residents. If you’re using a UK lawyer, make sure they’re registered with the UK Law Society and specialise in international transactions and conveyancing. If you want to use a lawyer local to the country where you’re buying, check the British Embassy website to find a verified list of English speaking professionals.
Choosing a mortgage in the UK is hard enough. Doing it in an unfamiliar market – and as often as not in a foreign language – only makes it harder and more likely you’ll hit roadblocks along the way. Recruiting a foreign mortgage specialist can help you in myriad ways, from opening an account with an English-friendly bank where you can hold your deposit, make your mortgage payments and use for the day-to-day stuff to pre-qualifying you for the mortgage so you know you can get one in the first place.
That would be us, then. You should be able to engage a good currency specialist with zero obligations to help establish how to make the most of your budget and make sure you’re planning properly for currency risk. You may just want to do a one-off transfer to pay your deposit or you may want to make regular transfers to cover your ongoing costs – either way, we’ll make sure you’re always cost effective and advise you on when to make your transfer or transfers to take advantage of a constantly fluctuating currency market.
The foreign exchange market is in constant flux, which means the value of each currency is constantly changing in relation to all the others. And while those changes are often small on a day to day basis, they can also be big over a period of days or weeks and have a huge impact on what you get for your sterling, especially if you’re buying a lot. It’s called currency risk and you ignore it at your peril.
No one can predict how much currency values will go up or down, or when. Lots of things can affect it, from political upheaval (think Brexit or Trump’s election for two prime examples from recent years) to the wider impact of economic or even climate change.
Let’s give you a real world example to show you what we mean:
Now let’s show you another way:
With a bank you get:
With a broker you get:
With Clear Currency you get:
One to one customer service with phone support and a clear, easy to use dedicated platform.
Every adventure begins with the first step. Make yours today by signing up for a free account. It only takes a minute or two and then we’ll get in touch to talk over exactly what you need and how we can help you keep more of your money when you transfer with us.
And if you’re not quite ready to open an account but just have some starter questions, you can call or email us on 0207 151 4832 and email@example.com.
Currency exchange doesn’t have to be stressful or expensive. Our experienced and dedicated team is here to help you keep more of the money you transfer.
+44 (0) 207 151 4832