We often talk about how a forward contract can protect your property-buying budget from currency fluctuations, saving you money. If you opt to book an open forward contract, there are a few extra things to consider. We run through the requirements so you can assess if it’s the right choice for you.
Get a quote from us today by completing our simple form. We’ll take a look at your requirements and arrange to speak to you at a suitable time to offer the best possible solution for all of your upcoming currency transfers.
What’s the difference between a forward contract and an open forward contract?
A forward contract lets you lock in an exchange rate for up to 12-months. The agreement then involves you exchanging one currency for another on a fixed date in the future.
An open forward contract works slightly differently. You can lock in the exchange rate for up to 12-months, but there is no fixed date for the exchange from one currency to another.
What’s the benefit of using an open forward contract?
If you opt for an open forward contract, it provides a more flexibility with transferring your money overseas. Unlike a regular forward contract, you don’t need to specify a fixed date in the future for when you trade with us. If plans change slightly or there is a delay in the buying process, an open forward can accommodate this.
However, there are several criteria that you’ll need to meet before booking one.
What are the criteria for booking an open forward contract?
- Do you have the correct funds? You must have the funds available to make the transfer you are planning for. We would usually ask for a 10% deposit up front, so you will need to ensure that you’re able to pay that straightaway.
- Are you serious about buying abroad? You must be able to show that you are a serious buyer. If you are using the open forward to buy property, you’ll need to have been on viewing trips or have viewing trips planned and have a good idea of which area you’d like to buy in, the kind of property you’d like and a fixed budget.
- Consider the cancellation process. It’s important to remember that with an open forward, there is the potential for rolling costs and cancellation costs. Speak to your trader for further information about this