Having a sound financial action plan is essential for a successful move abroad. A little research into how and when to transfer funds, the best bank to open an account with and the type of mortgages available in your new country of residence can go a long way to making your move stress-free.
When moving money abroad, there are various options available. Most Britons opt for using their high street bank which normally offer a range of transfer methods with the cost depending on the speed and quantity of money to be transferred. Foreign currency brokers are another option and, although usually reserved for the transfer of large quantities of money, can now also be used for transferring regular, relatively small amounts for payment of an overseas mortgage for example. Clients should always check the credentials of currency brokers and independent money transfer operators, ensuring that they are fully regulated before using them. Western Union and MoneyGram are two reputable money transfer operators and have the added advantage of the client not needing a bank account in their new country of residence. This can be a convenient initial solution until you have had time to set up a local bank account. Internet transfers are also popular. Paypal offer a transfer service at a rate of 3.9% of the amount to be transferred plus an additional 20 pence.
As we all know, currency exchange rates fluctuate and it is important to compare and contrast deals just minutes before transferring money abroad. The website www.fxcompared.com is an excellent tool for comparing deals. In order to avoid risks to spending power due to fluctuating exchange rates, shift most or at least some of the money to the currency you are most likely to need in the long-run while the rate is working in your favour. If you continue to have financial commitments at home, keep your home account open and if you continue to have an income from your home country, such as a pension, parallel banking in two currencies at an international bank will mean that your pension that is paid in in sterling will be available to you immediately in Euros for example. To name just one, HSBC offer this service. https://www.expat.hsbc.com/1/2/hsbc-expat/ways-to-bank-with-us/banking-in-multiple-currencies
Mortgage conditions vary a little from country to country. Here is brief intro to banking and home loans in each country:
The top banks in Spain include Santander Central Hispano, Banco Bilbao Vizcaya Argentaria (BBVA), La Caixa and Banco Popular, which all have branches and cash points nation-wide. Conditions for obtaining a mortgage have become stricter in recent years, but the standard requirements to fulfil include provision of at least 3 wage slips, the past six months banks statements or the last 3 years accounts for the self-employed and a N.I.E (foreign person's identity number). Non-residence in Spain will need a Spanish guarantor. Generally speaking, lenders consider a person able to pay the mortgage if liabilities are below 35% of their income. In some cases a 100% mortgage may be available but the average is 60-80% to pay over 5-25 years at a rate of around 4-5%.
The top French banks, in terms of assets and number of nation-wide branches, include BNP, Crédit Agricole and Societe Generale. Obtaining a French mortgage as a foreign resident has become a little easier than it used to be. Having said that, the process is notoriously bureaucratic so – forewarned is forearmed – come with every document imaginable and a generous helping of patience. A French lender considers candidates for a mortgage viable if they ask for no more than 80% of the property value and repayments do not exceed 33% of their income. Something to be aware of when looking at property prices in France is that mortgage insurance is obligatory and needs to be added to the total cost. Fixed and variable mortgage rates are available in most cases and the Banque Postale (the French post office) also offers large home loans, often with competitive rates, albeit with inflexible conditions.
To give you some idea of how mortgages work in Italy, most banks will demand that your monthly outgoings for the home loan do not exceed 33% of your net income and they range in length from 5 to 30 years with the possibility of capped rates in a few cases. Banca Carige is one of Italy's leading banking, insurance and pension groups, UBI Banca is one of Italy's largest banks in terms of total assets and Banca Popolare is a group of large, local banks with a reputation for serving families and small-business – it has many branches nation-wide.
Deutsche Bank continues to be Germany's unrivalled strongest bank and was even the world's number 1 in May 2013. Commerzbank, KFW Bankgruppe and DZ Bank are all also reputable names in the world of banking.
When buying property in Germany, better be well-prepared with all the necessary documentation, including bank statements and tax returns form the past 2 or 3 years.
German lenders are notoriously conservative when assessing a borrowers capacity to repay a mortgage. Age, income and stability of employment, accrued debts and assets will all be put into the balance before a German bank will agree to give a client their mortgage. While 100% mortgages are available, it is not uncommon for German lenders to require a 20% down payment. On the plus side, German banks lenders offer a variety of mortgage types to suit different situations and client profiles.