Moneycorp | Foreign Exchange
Your money matters!
Anyone living in the UK and thinking about buying a property in Portugal should consider using a foreign exchange company to transfer their money. Transferring money this way has many benefits as Marc Morley-Freer of Moneycorp( www. moneycorp. com) explains.
“ If you are going to purchase anything internationally, it makes sense to use a foreign exchange company” he says. For example, you may be buying a property in Portugal, putting down a 30 % deposit and paying the rest by local finance. Firstly, how do you get the initial lump sum of say € 50,000 over there? Most people would pick up the phone to their bank and do a bank transfer. But this is an ancillary service for the banks and all you will get is the day rate, which is set in the morning and can be up to 4 % from the real market rate as it is not regularly updated. There will also be very little room for negotiation, if any and the person you speak to is unlikely to have the time or the expertise to give you any advice. You’ ll pay between £ 25 and £ 40, depending on which bank you are with, to send the money overseas and it will take 5 days to get there.
“ When you speak to a company like us, you will be given a personal dealer, who understands when to buy and can negotiate a really good rate. You’ ll probably save 2 / 3 % on the transaction. You send us the sterling and pay £ 15 for us to transfer it. If this is within the Eurozone it will arrive the same day. It can also be a great advantage if you are able to tell your solicitor that you have instructed a foreign exchange company and that they will get the money‘ today’!
David Smith, who works in corporate finance in the UK, recently bought a 4 bedroom villa on the Algarve and transferred the balance of his purchase money through Moneycorp.“ We have been going to the Vale do Lobo / Quinta do Lago area for 15 years for holidays and when we were there last summer, we reckoned prices wouldn’ t get any better. We paid a deposit of 20 % through our bank, but paid the remainder – because it was such a large amount – through Moneycorp. It was very easy. I agreed with our dealer a target amount that we hoped to pay and when the exchange rate meant we could meet that target we did the deal. He was very diligent in keeping us informed and the transaction was very easy, definitely easier than dealing with our bank” he says.
Another advantage of working with a foreign exchange company is that you might know that you will need to transfer 30 % of the purchase price, but not‘ today’. It could be in the next 4 weeks. Marc explains“ we can work with you to get you the best rate, which might be sooner or it might be later. A bank cannot do that as it has too many customers. So, one of our customers will not only get the best rate, but also could get a discount on the price they pay for the property. Yet another advantage is that if you buy your property with a local mortgage, you can set up a regular payment plan with us. This allows you to pay your mortgage every month at a set rate, which you agree up front and can be set for up to two years. We charge a £ 4 fee, rather than the £ 25 plus that a bank would charge. And by agreeing a rate up front, you know exactly how much you are paying each month. If you used your bank, the amount will fluctuate monthly, which is not an ideal situation. We were the first company to initiate this system about 7 years ago and it is still a relatively unknown service. It just takes away all the hassle.
“ If you wanted to use sterling to pay the balance of the purchase price, you can take a‘ forward contract’, which means you lock in the rate in advance rather than when it is due – which could be months away and when the exchange rate is worse. We purchase all of the currency on the customer’ s behalf and they pay a 10 % deposit to secure the rate, paying the remaining 90 % when the full value is paid out. It is also hugely beneficial to repatriate money through a foreign exchange company as overseas banks charge even more for transfer and commission rates than UK banks do!”
56 | Summer 2012 | www. portugal-life. net |