ready to complete but exchange rate so bad!!

Forgive me if I'm posting this in the wrong place....

We have been informed that our property is ready (woo hoo!!!) and that we now need to make arrangements to fly to Spain to complete the purchase. 

Our concern is the rate of exchange at the moment - completion couldn't have come at a worse time for us, financially.  We have been watching the exchange rate extremley closely for the last month or so and were worried when it was 1.34 euros to the £, but at it's lowest today it was 1.27!!!  We bought 100,000 euros at 1.30 last week (absolutley gutting!) but we have to buy another 107,000 euros in order to pay for the property. 

Anyway, what I'm wondering is, has anybody here delayed their completion for the sake of the exchange rate, in the hope it will rise, even a fraction.  At 1.30 euros to the £, we stand to lose about £10,000 compared to the excahnge rate we got when we put our deposit down.  Is it even posiible to delay completion??  I'm not talking years, we're moving out in September so ideally, we'd like to complete in July.  We realise that the exchange rate may not change in our favour even by this time, but it's a risk we're willing to take at the moment, after speaking to Moneycorp, it seems their opinion is that it can't get that much worse than it is now anyway.

Any advice is appreciated!! (hope my ramble of figures makes sense!! I've confused myself )

Terrible, isnt it?  I'm in the same boat but not completing until May.  Unfortunately, the exchange rate is forecast to get worse.  If I'd completed last week I'd have saved over 3 thousand pounds.  God only knows what the rate will be in May.  If I could forecast the forward exchange rates I'd be rich and wouldn't have to worry about things like this.

Trouble is, do you complete now at a low rate or wait a while hoping it goes up?  More trouble, what if it goes down?  In that case you'd lose even more.  Sorry I'm not much help but I am in the same quandary.   I am not a financial expert but I have been reading the papers and they forecast it to go even lower so, for what my penny is worth, complete now.  Then again, if the people who write these articles could forecast the markets they wouldn't be wasting their time writing newspaper columns, would they?

 

It really is awful, and FX is the main topic of conversation in our house at the moment.  Interesting that you say it's forecast to get worse,  when we deposited our money with moneycorp last week they told us that the exchange rate would be up and down for the first 3 days of this week and that any lows over these days would probably be as bad as it would get.  They encouraged us to exchange at 1.30 and at the moment I'm glad we did, but who knows whether that was the right decision?  Foreign exchange is so unpredictable, and playing a waiting game in the hope things will get better is stressing me out like mad! I'm also annoyed because a few weeks ago it was 1.35 and we stupidly decided to wait as we thought that was a bad rate!!  We were going over to Spain mortgage free with a tidy sum to live off for a while, but at this rate we'll be needing to take a small mortage to make sure we've got enough to tide us over before we find work (we've planned for 2 years living money) Then, we have to account for paying our mortage on a monthly basis!

Up until now, my husband has dealt with all of our finances while I've been quite happy to bury my head in the sand and buy new shoes.  I'm very quickly learning that the Euro is NOT monopoly money!

Hi my name is David and I'm also in the process of completing in the end of August. I have being working with a couple of Foreign Exchange Company’s. I have being told that the best thing to do is open accounts with a couple of Fx company’s and try and get the best rate by doing comparisons with them.

 The company's I have opened an account with are Money Corp, Hifx and Excel Currencies. I have not being overly impressed with the first two but still not bad. However I was recommended by a friend to give Excel Currencies a call as they say they give a guaranteed unbeatable exchange rate.  Which I taught was a bit too good to be true. but when I got an account opened with them, I don’t know if I got lucky with the broker I got but he was extremely helpful and he just gave it to me straight he informed me all the way back in November that I should try and get as much paid for as soon as possible as the rates were on the way down. Didn’t believe him at first but I obviously found out the hard way like so many others that he was right. My advice for you is to open accounts with a couple of Fx Brokers to make sure that when you do have to bring money over you will get the best rate.

If you like I will give you the name and number of the broker Im working with from Excel Currencies...

Did you find out if you can delay the completion date ??????

Absolutely no guarantee on these figs, but an FX dealer I know at a major UK bank was predicting the euro to bottom out at 1.25, before crawling back to around 1.31-1.32 over the summer (with a possible short term peak at 1.35), afraid he was then expecting rate to fall back again towards end of yr.

In the current volatile market place, I think it is hard for anyone to be sure, and unfortunaltly sterling is no longer regarded as one of the worlds leading currency's. 

John

Hi there,

Snap, we are in exactly the same position. We need to f ind another £10,000, and its not going to be easy. I have heard that the rate is going to go down even further which gets even worse for us all in this position. Possible as low as 1.10, so you did well to get some at 1.30.

it seems that all properties are sold on the basis that the exchange rate is 1.45. However are they going to sell any in the future, i really dont know. What are these companies telling unwitting victims who come out to Spain on viewing tours?

As for delaying signing the contract, well this is not good either. Our developers are going to charge us interest because we have not been able to complete. Through no fault of our own. We are yet to find out how much this is going to be.

We have been given false promises for the last two years and its cost us an absolute fortune so far.

Good luck

Hi Jenna

Bob's right, it is hard to know what to do for the best. If only we all had a crystal ball eh??

If you do delay completion I would think that you would have to have a really good reason to give them. Also as Bob says, who knows which way it will go??? no one can give you advice. But when we completed it was lower than when we put deposit down and is annoying, I know, but a year on and we are so happy with our place it's all worth it in the end. Just ride the storm  think, that's all we can do really. Like having a baby really, all the pain and as soon as you see what you have it is soon forgotten  .

A Cardiff girl too I see, are you moving over permanently? Wish we were.  One day  .

Xe.com are offering 1.28 today, although it has been yo- yoing between there and 1.26 this week. Seems a long time since our moaning about 1.42 when we completed in December last year (there is a thread somewhere about the rate dropping and we were all worrying about it dropping below 1.40 from what I remember!!) . Makes me wish I hadn't fallen out with one of the agencies and had booked a rate in advance for our regular payments .

Thanks for all your replies,  I don't think we're going to try and delay completion, but we're still watching the exchange rate closely and we've sought come advice and the opinion seems to be that it could get worse so it looks like we'll have to cut out losses and go ahead soon.  We're signed up with moneycorp and Currencies direct and so far moneycorp have been the better of the two but I'm going to give Excel currencies a call too (thanks for that David!)

Candyfloss - yep a fellow Cardiff girl here, we are moving over to Spain permanently, we've sold our house here and currently staying with the Mother-In-Law while we wait for the big move . Not as bad as it sounds, we have a self-contained flat in her big house and not paying anything to stay there so at least we can save a bit of our wages to compensate for the bad exchange rate. It's just a little bit cramped with me, hubby and a baby in a one-bedroom flat!

We're trying to look on the bright side though, the move is costing us more than anticipated but we are sure it'll all be worth it in the end!!

** EDITED - Please respect terms of posting **

For all Buyers with sterling funds to pay for their properties may I suggest a different method to consider ....

Apply for a Spanish Mortgage and at the same time transfer your funds to a Sterling Account with the bank.

They can see that you have the funds available and therefore have credibility, the mortgage agreement is taken out in euros so you don`t have the drastic exchange differential and your maximum exposure to the CURRENT exchange rate is the monthly mortgage payment with the need to transfer from sterling to euros on a monthly basis...

Your sterling can also be put in a high interest account that will offset some of the interest charged on the mortgage.

Ensure you get a mortgage that allows you to overpay without any fees and WHEN (this is the tricky bit) the exchange rates become more favourable you can pay off a significant amount of the euro mortgage....

I am sure there are some negatives (fees/taxes) but you are not exposed to a 12% variance that we see with the rates as they are today or as they will probably stand in the next few months..

Hope it helps

Anthony

 

 

hi all

we read somewhere (can't find thread now) that it is possible to take over the developers mortgage on the property and continue paying this. Does anyone have info on how this works and would you recommend it.

cheers

woody

Hello Woody.

This is the normal proceedure with all off plan properties. How it works. The buyer puts down a reserve and then makes this up to 10%  Then a certain amount of the price is paid off in stages. Depends on the promotion. Usually the buyer will have paid of half of the selling price. The promoter then has a mortgage in place with a bank of his choice and you take this on. You can also shop around for a better deal from any other bank. If the promoter tells you that there is a penalty if you do this, it is illegal. You have the right to choose the mortgage you wish to have. Is this clear enough? Regards Myra from www.costaadvicebureau.com

 

There are many banks here in spain who will talk to you about the present rates. Most banks give tourist rates but you can push for commercial rate exchange. It is obviously best to have your mortgage in euros

This message was last edited by myra cecilia on 3/22/2008.

Anybody about to complete on  al  andalus veranda agua in vera . Our contract states completion third trimester 2008 which was september but we have now been informed it will be june. due to the decreasing value of the euro we were considering waiting untill our original completion date but don`t know if there are any charges for this .also is anybody considering the developers mortgage on this property. need advice anybody !!

Hola grandslam

Have you joined your development forum yet as there maybe many there chatting & you could also ask in there. Just click blue link & join free. Good luck. It's a trying time with rate being as it is, I realise.

Al Andalus Veranda Agua

You need to see if the contract as a clause regarding early completion which obligues you to complete if that happened. Of course check that all that was contracted and advertised together with full and valid FOL are in place before signing.

Best wishes,

Maria

It surprises me that the builders (I am assuming it is the same builder that built the other Al Andalus complexes) have got their act together quick enough to provide the units before time. I know some of the buyers on Thalassa had to wait for overdue completion dates and up until recently, I believe it was still a building site even though people have been resident for 12 months or so.

Mark

We used Currency  Solutions and they offered us the best possible rate in November. - my husband phoned all the companies before he said right Go.   If we had exchanged  in the afternoon we would not have had enough money in our account - that's how tight we were .     They have an arrangement with the BOS and the money is deposited with the bank in their account overnight   - they get the interest from the bank and the customer gets the higher exchange rate.  We were very happy with them.  I  heard about them from these boards.   They deposited it in the bank in batches of 50,00 ( or was it 49999) to avoid tax - our bank manager was well impressd.

The next time my husband used Currencies Direct ( he thought he had used the same company as we too have opened many accounts with different companies ) but I don't think they have the same arrangement but I could be wrong as they were not up front about it .

Hi, I'm new.

I've been reading with interest some of the posts on here but there has not been much said about the exchage rate for a while so I thought I'd put my situation to you. I bought an off plan property 5 years ago on the Costa Blanca, a two bed, two bathroom, ground floor apartment on a small complex. Everything went to plan, very happy with the finished product and I've have nothing but praise for the developer.

Two and a half years ago when things were still riding high and I was getting nearly 1.50 euro's to the pound, I decided to put a deposit down on another off plan development,  opposite the one I have now (same developers). Completion is due end of the year and the complex is looking fantastic. Problem is it's now going to cost me an extra 25-30K sterling.

I know you can't predict future currency movements but there has been so much in the press recently about how in the next few months the euro is going to take a big fall. What do you think? I mean these so called experts have been saying this for the last six months and it hasn't happened yet.

So, what shall I do? Try and get out of my contract (completion should have been December 08)? Ask for a reduction? Or bite the bullet and hope the pound picks up?

Thing is, if I go for a euro mortgage and the pound recovers, I'm laughing. But what if it doesn't, what if it gets worse?

Sorry for all the questions but it's doing my head in.

Hi Verona, so sorry to hear about your predicament.

Its the so called financial experts that have put the world in this mess in the first place so they would be the last people I would listen to!

As far as your situation would go, I would try and get out of the contract but I dont think you will be able to without losing your deposit. Also, getting a reduction looks unlikely. If you did continue with the purchase, will you be relying on rental income to service the mortgage? If so, please dont go ahead!

IMHO, I would swallow the loss and get out now. Sorry, I know this is not what you want to hear but I think its the best option.

Thanks' Eva. A lot of popeople have been giving the same advice.

I would have to rely on rental. I know this is risky, but the one I have now does really well, in fact I've noticed an increase in bookings and enquiries. I think this is down to the fact that people would rather cut back on other things and still go on holiday. I think where people would go and stay in say a 5 star hotel, instead they are now looking at self-catering to cut down on the cost of the holiday, so I think this sector will still do okay.The other thing is I might not be able to get out of the contract without hefty penelties.

although many people (ie the press) keep on painting a picture of doom and gloom on the economy, in my humble opinion the rate is on the up...it looks as if the pound is trying to force its way through some levels 1.13/1.15 but keeps finding resistance.  i think rather than waste the capital you have already placed into the property, it could perhaps be an idea to ride out the storm until the rates come back up to the 1.2s. although i am not an expert on this, i have plenty of dealings with currency and have also been forced to look into it further as moving to spain! have friends in the market and a good currency broker that basically informs me of any changes in the rates that he knows could help me achieve more euros...again, not an expert on this, so please dont attack!!! best of luck. ben

Cheers Ben.

I'd be happy with 1.25/1.30 come completion in about Sept 09. There has been much talk of the euro taking a tumble but it just doesn't seem to be happening at the level I would like. I think the best thing I can do is hope for 1.25 when I put my next chunk down, get a euro mortgage and then hope the rate improves.  Then maybe try and get rid of it if things are tough. It's in prime and sought after location so should sell and hopefully break even.

Cheers,

verona.

Very few developments complete on time anywhere, not just in Spain!

So if Sept 2009 is the contract date ,it is possible that it will be much later before they get the licence of first occupation [ do not complete without it and everthing else] 

All your facilities have to be ready and you need the LFO to be able to connect to electric and water.....never complete in anticipation of the LFO being issued! 

This may help you with the exchange rate as a lot of pundits are saying that it should recover to circa 1.25 in 2009 as per the previous post  and maybe a bit better in 2010......could of course go the other way!

Quite easy to delay completion to suit yourself by wanting everything perfect.!.....may even get a reduction offer if the developer gets frustrated.....happening a lot just now

Thanks Rowlandsbb. I plan on delaying completion for as long as I can or at least till (if) the exchange rate picks up.

Completion should have been March 09. Although most of the complex is finished like the pool, garden, gym, tennis court ect... Our block, which comprises of three strories and about 25 apartments, is the last of four blocks to be completed. When I last went out in February 09 it was just an empty shell with not that much going on. I think they have really cut the work force down and last time I looked only about 45% had sold. Not sure if this will work in my favour or not.

If you have a bank guarantee check to see if the developers are out of time in your contract- your laywer should be able to advise and if they are ,you may be able to cancel and exercise the BG , if the developers do not repay your deposit

That is if you want to .......and you may consider that it's location is good and for the medium to long term it will be OK and you will also get enyoyment from using it

But if you can get out ,bear in mind that just now there are lots of good deals in good locations available at relatively low prices-for ready now most developers are quoting asking prices at circa 25% less for all price ranges

And also lots of good deals on re sales

Just consider all your options!

 Try and find out how many have sold as you dont want to be buying on a community where the developer has so many left over. This could lead to unpaid community fees and he would also have total vetoe at community meetings as the majority voter.

Many developers dont pay community fees so everyone suffers and has poor if any facilities. You sound like you could be out of contract now so check on the penalities and if you can get out it may be an idea to do so and move to a resale unit.

I have been reading the comments about the exchange rate  and I think that in the next two months it will be a little better and we need to get the most for our pound I have been talking to several  exchange companies  and so far the one that has come up with the best quote and information is Excel who are a small company and can do better deals,Someone on EOS mention them so I got in touch with them today and they are just brilliant thanks for that,as we are all in the same boat i wondered if a few of us got together we possibly would get a better rate on our money it seems to me that the more your exchange the higher the exchange rate so we would get more for our money.when I was talking to Karl at Excel I asked about holiday money and the exchange rate he said that they can get a better rate as they buy for about twelve people at a time so get a better rate that way so I think that it could work for very large amounts. When i bought my property the rate was 1.49 and now today it is 1.17 and due to complete soon so it is a lot more money to find and with the credit crunch it is hard for us all,Has any body have any other idea's would like to here from them or had any dealing with Excel and what did you think of them?

 

 

This message was last edited by sandran on 10/08/2009.