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 |