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As part of the purchase procedure, you will need to make a large
currency transfer for your deposit or main payment quickly or sometime
in the future. You may also want to make regular payments for your
mortgage and living expenses. Many people use their own banks to do this
for them but incur heavy charges and poor exchange rates in the process,
costing them literally thousands of pounds extra! e.g. £2000 on a
transfer of £100,000.
Fluctuations in the international money markets can work both for you and
against you and nobody can accurately predict future exchange rates. When purchasing your
Spanish property, you'll have to pay
your deposit and stage payments in Euros, so, as your capital is in
another currency (e.g. £GBP), you may want to fix the exchange rate to
fit your budget, to prevent unwanted surprises in the future when you need
to make payments overseas. Using a specialist Foreign Exchange (FX) company to facilitate
this is generally much easier and significantly cheaper than using your UK bank.
You are literally buying your Euros from the FX company at an agreed
exchange rate. They will hold the currency for you until you instruct
them to release the funds to your chosen overseas account.
There are many companies who specialise in providing Foreign Exchange
(FX) services and offer more attractive exchange rates and can generally
respond quicker than the high
street banks. Be sure that your chosen FX company
guarantees NO RECEIVING
CHARGES at your overseas bank or offers to refund any receiving charges! You can obtain your Euros (or other currencies) from an FX
company at the current rate quoted and they'll keep that currency ready
for you to release upon your instructions.
It costs nothing to set up an FX trading account with the company (or
companies) you
select but they will require proof of your identity first. A recent
utility bill and a copy of your passport is generally all that's
required. These can be sent by fax, email or post. You'll probably be
assigned your own dealer as your personal contact. They will be able to
guide you and are there to keep you up to date with the current state of
the FX market.
When you decide the time is right or it becomes necessary to trade your pounds for euros, you’ll
call the FX company and agree a rate with
your “dealer” and make the deal over the phone. The FX company will then send you a
“contract note” detailing the amount and rate that you've agreed. You
then sign and return the agreement to
them by email or fax. You will also receive a form to instruct your bank,
detailing the amount of sterling to pay to the FX company from you
account (which you
should do quickly to avoid potential late payment charges) and their
bank account details. Your bank then transfers this amount to your FX
company to complete the purchase of your Euros.
When you are ready to move money to Spain, contact your dealer and let
them know that you’ll be sending your instructions to pay the recipient
in Spain. (e.g. your Spanish bank or the builders bank) Fill out the
transfer form with the payee’s bank details and IBAN number and send it
to your dealer. They will then release the funds as you specified and
that is the transfer completed.
In addition many of these FX companies guarantee that there will be no
receiving charges made at the receiving end (e.g. your Spanish bank
account) DON'T FORGET THAT IT IS IMPORTANT you check this with your FX
company BEFORE dealing or setting up an account with them.
Most FX companies will set up regular transfers of your pension or
salary etc.
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