You just travelled in a wonderful country and so you plan to buy a house there to spend the holidays? or you plan to move abroad and so to buy a property abroad? or you need to receive or pay rent in a foreign currency? In all that cases you have to be very careful about how you will convert your money. What is the best way to send money overseas when buying a house? There are two steps to do, or we can say three mistakes to avoid!
Track the exchange: best way to send money overseas
This is the first step. Track the exchange rate in order to have a high exchange rate the day you transfer. Indeed currencies value change everyday and currencies exchange rates vary and fluctuate every hour. Some currencies are very volatile. This is particularly the case for the currencies of countries which are either politically or economically unstable (some africans countries) and for the countries in development (south Americans countries for example or Asian countries). And then there are the currencies with a low volatility. These currencies are those of the developed countries and they are the most traded in the world: American dollar, euro, british pound, australian dollar, canadian dollar, singapore dollar, hong-kong dollar, japanese yen, and swiss franc. However if something happens in the country these currencies can move a lot. It is actually the case for GBP which has lost a lot of value against the other currencies since the Brexit in last June.
When you transfer on a regular basis or if you have to transfer a large amount of money even a small fluctuation can make a huge difference in the amount in money received. This is why it is important to transfer a day the exchange rate is good. If you plan to buy a house abroad it means you’ll transfer a big amount of money so you have to really pay attention to the exchange rate.
Avoid your bank
Do you know that in average a bank takes between 4% and 8% of fees on each money transfer? That’s enormous. And that means if you want to convert 150’000 GBP in euros to buy a house in Portugal for example, the bank will take 12’000 GBP in fees! You definitely better to use a broker or a service specialized in money transfers. There are a lot on the market and they take between 1% and 4% of fees on a transfer. It is simple to use your bank but it is a mistake to avoid.
Compare the money transfer services is the best way to send money overseas
Do you know that almost 500 money transfer services exist according to the World Bank? That’s huge. And moreover they all apply their own fees. So it can be very painful and time-consuming to know which one to use and which one is the better. The best is to use a comparison service for international money transfer as it shows all the options for a specific transfer with their rates. It is exactly the same when you compare flights and hotels, you use a comparison platform. So why not for international money transfers?