If you’re planning to transfer currency for an overseas investment, you’ll probably
talk to your high-street bank. Don’t! You’ll save money by going to a specialist
currency exchange dealer.
Send all your international transfers through currency dealers rather than banks. Why?
They give you a better exchange rate, lower costs and a speedier service. This is a constant source of annoyance to the banks but they can't compete with dealers.
An average high-street bank will probably offer spot rate (the real, interbank, rate of exchange), less 4 per cent. An average currency dealer will offer an ordinary customer spot rate, less 2 per cent. On a £100,000 transfer you save £2,000 on the exchange rate alone.
The dealers will be quicker too. In the days before currency dealers became popular, the money would be send by a UK bank to another country via another bank in the local country who would then eventually send it to the end bank. There were three banks involved but, more crucially, there would be a bank in the middle that didn't really care how long it took them to send the money!
Check the Charges
When it comes to comparing dealers, it is worth remembering that, in addition to
exchange rate differences, there are also differences in charges. Currency dealers typically charge less than high-street banks for transferring money abroad. In fact, many of them don't charge anything at all or, more accurately, they incorporate the fees into the exchange rate.
One example of this is - two transfers to Turkey done through a well-known high-street bank. The first for £100,000 and the second was for £200,000. The high street bank charged fees of £535 and £1035 respectively. This is a total of £1,570 just in bank charges.
A currency dealer would have charged either nothing or a nominal amount such as £20 (i.e. a saving of £1,550). And remember that this is in addition to the exchange rate differences (which probably amount to another couple of thousand pounds).
Link to our currency exchange partner page - LINK
Buy to let mortgage lenders are sighing with relief after the European parliament voted to exclude landlord loans from tough new lending rules.
The UK’s Council of Mortgage Lenders (CML) has campaigned long and hard for
buy to let to be treated as a commercial loan rather than a residential mortgage, which was the initial thrust of the European directive on credit agreements relating to residential property (CARRP).
After intensive lobbying, the European Parliament’s ECON committee voted to
leave buy to let lending outside of the directive.
“We’re pleased to see that many of the long standing issues we have been
lobbying on have reached a positive outcome for the UK. So for example, the UK
would be able to exempt buy to let from the directive,” said a CML spokesman.
“However, some provisions have been included which only emerged at a late
stage of negotiations but which may not have had their full implications considered and we will continue to work on these issues as the directive goes into its next stage of discussions.”
CARRP is aimed at implementing a Europe-wide mortgage policy, but UK lenders
claimed this was unfair on buy to let landlords as the UK market differs significantly from the rest of Europe.
In most European countries, the buy to let market is either fledgling or developed through lending to companies rather than individual investors.
UK residential mortgages will come under the CARRP rules.
As a result, mortgage lenders will have to strengthen underwriting for loans, offer a cooling off period to borrowers and will have less power to repossess properties if homeowners fall in to arrears on mortgage repayments.
“Parliament has given a qualitative breakthrough regarding the initial text. We now have more ambitious legislation which establishes the international golden standards bringing in the principles recently adopted by the Financial Stability Board”, said the directive’s main champion Antolin Sanchez Presedo after the vote.
“We introduced a new chapter on financial education, strengthened information
to consumers, established a reflection period and the possibility to receive
good advice as well as fair principles for crisis situations.”
Tough new mortgage restrictions to stop borrowers falling in to arrears have been proposed by the UK's Financial Services Authority (FSA) after months of behind-closed-doors negotiation with lenders.
Out go self-certification and interest-only home loans for most mortgage borrowers.
In come strict affordability tests to combat payment difficulties and mortgage fraud for borrowers – with lenders having to prove borrowers could afford their repayments before taking any action to seek arrears or repossession.
The FSA claims the mortgage market review is aimed at preventing a return to risky boom time lending based on the assumption that house prices would continue to rise to repay loans.
The review applies to all residential mortgages and remortgages but excludes buy to let landlords, who will still have access to interest-only deals, providing lenders continue to offer them.
The FSA is seeking feedback on new mortgage rules for entrepreneurs who borrow against their homes as security for business spending.
The FSA proposes three core mortgage lending principles:
Lenders should only agree mortgages or loans with a reasonable expectation that the
customer can repay without relying on uncertain future house price rises. Banks and building societies must verify income for every mortgage applicant.
Lenders should assess the borrowers ability to repay a loan on the basis interest rates might rise
Interest-only mortgages can only be agreed if the borrower can prove a strategy for repaying the loan from other resources and that the plans do not rely on future house price rises.
FSA chairman Lord Turner said: “We believe that these are common sense proposals which serve the interests of both lenders and borrowers. While the excesses of the pre-crisis period have largely disappeared from the current market, it is important to ensure that better practice endures in future when memories of the crisis recede and the dangers of poor practice return.
“The three key proposals are, we believe, the most effective way to tackle the problem of risky lending.
“The proposals reflect the ideas and input of many stakeholders, including consumer groups and lenders. We believe these proposals will hardwire common sense standards into mortgage lending and guard against the risky lending practices of the past – leaving most borrowers unaffected, but better protected.”
Consultation on the proposals is open until March 30, 2012.
Mark Alexander, founder of Property118.com welcomes the initiative and says “the countries which have fared best since the beginning of the credit crunch are not those which could be described as a Nation of Homeowners, Germany is a good example. Landlords and mortgage companies need to be far more diligent in making sure that people can afford to stay in the homes they choose to live in.”
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