Found your Dream Ski Home? Make Sure You Don’t get Caught Out by Bank Fees & Changing Exchange Rates
Buying a ski property is the dream of many, but there are a few extras which you must consider when buying a home abroad that you don’t have to think about when buying local. We've listed a few of them here:
Overseas V UK Mortgages
Since the financial crisis, UK banks have been hesitant to lend on foreign properties. If you do want a UK mortgage, the way forward is to remortgage your current home. The benefits of doing this are that you are covered by the FCA, and you are more likely to be familiar with the process of application and likely obstacles. Where a UK mortgage might let you down is with repayments as they may be affected due to currency fluctuations. Getting a mortgage in the country you are purchasing in means rental income, mortgage repayments and final sales are all in the same value, simplifying the process. The potential for a better mortgage deal also increases in the Eurozone, and most countries (particularly France) have significantly lower interest rates than the UK. The main drawback of this is that you are not covered by the FCA.
Foreign Exchange Rates
If you’re looking to buy a ski home, it is likely that you will be exchanging your Pounds for either Euros, American or Canadian Dollars. Whilst your bank might seem like the obvious go-to for the best deals, the best rates are frequently found with specialist currency brokers. Although bank transfer fees might seem comparatively low, the exchange rate usually includes a rather large profit margin. Currency brokers typically have better exchange rates, and large transfers are generally fee-free, giving you a significant saving.
Forward Currency Contracts
Purchasing your ski home is often a lengthy process, and currency fluctuations represent a very real risk to purchasers. If your budget only just covers costs at the current exchange rate, a shift against you could mean the difference between buying your dream ski home or not. One way to lessen exchange rate uncertainty, or even if the exchange rate is too good to miss, is a forward contract. Like a “buy now pay later” option a forward contract is useful when today's rate is good, but you don’t need to make a payment straight away.
When buying your dream ski home, it is important to get advice from a professional, as the procedures and processes can be quite different to those you are used to in the UK. Read more about currency considerations here or reach out to our partners at FC Exchange here.
WHILE YOU ARE HERE...
Looking for a ski property? Start your search here!
Need help with a mortgage to buy a property in the French, Swiss, Austrian or Italian Alps? See our mortgage tips and advice from experts.
Want to know which ski resort is best for your ski property purchase? Check out our ski resort guides.
Need to swap some Pounds for Euros? All you need to know about currency exchange.
Want to know about buying a ski property in the Alps? Get the lowdown with our buying guides.