Transferring Funds Overseas

11/09/2007

A couple of months ago I wrote an article on transferring money into your account back home. There was much interest and I feel it deserves more attention especially with regard to rentals and mortgages. Therefore I will expand on this topic and hopefully address all questions and fears you may have surrounding wiring money internationally.

Many expats, such as myself leave homes in their native countries which they rent out or pay mortgages for living abroad. These practical money issues can become quite time consuming and costly if not taken care of properly. I have experienced that most expats are responsible and do want to do the right thing, but often end up in some financial trouble. This is largely due to the fact that it is not until they reach their expat land that they discover the limitations or problem areas of the any banking procedures they have set up. You may have expenses as a result of rental incomes, a monthly mortgage payment, utilities or building fees. You will of course also have local taxes to cover. In some cases you may want to employ a property manager to pay certain expenses such as your electricity, water, building bills and/or other. Choose someone you trust, have had prior experience with or someone who comes highly recommended.

In the case of paying for a mortgage without enough cash flow at home, you will need to ensure that there is always enough money in your bank account to cover the monthly mortgage. I have had the unfortunate experience of paying late fees some months due to problems incurred while wiring money home as discussed in my previous article, so I would strongly suggest that you transfer a lump sum a few times a year instead of wiring funds monthly. This has have saved me a lot of worry and many headaches. Also you do not end up paying monthly wiring fees which do tend to add up. Lump sum transfers work in your favor too when the foreign exchange rate is working in your favor.

If you do find that you are wiring a lot of money home I offer this help from Lief Simon’s Article that might be of service to you: “One of the foreign exchange groups we work with has launched a product that amounts to the easiest, most efficient way to handle this administrative challenge I know. Through HIFX, you can arrange your affairs to limit both your wire expenses and your exchange rate exposure. The product they're offering allows you to lock in an exchange rate for up to two years. You buy ahead enough in the local currency to cover your mortgage expense for an extended period going forward. Then you set up a direct debit from your home account for a transfer each month, of the same amount, into your foreign account. Not only does this eliminate exchange rate risk, but it also ensures that your mortgage is paid every month on time. For me, this is perhaps the biggest advantage. Using this service, no longer would I have to remember to send a wire or visit the bank in person to make a deposit. Doug Johnson with HIFX is the man to speak with for more information and to set yourself up to take advantage of this useful service: doug.johnson@hifx.com.”

These methods and suggestions are useful for all types of payments, whether you have a mortgage or not, but if you do wire money home on a regular basis for whatever reason it is best to be prepared and be as knowledgeable you can be about services that are available to you. besides being very you could end up saving money and I am sure you will much more peace of mind.