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Old May 6th 2012, 5:37 am   #1
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Default Transfering money from UK to USA to buy a house

Hi. UK citizen in USA as a permanent resident.

I have approx 75k UK Sterling I want to transfer to US, works out roughly $112K USD. My UK bank is Co-op, my US bank is Bank of America.

I basically want the maximum amount of $ in my US bank, the money will mostly end up as downpayment to buy a USA home.

So:
- what's the best exchange service to produce maximum $ USD?
- I have online banking for my UK bank account, but really it is only for UK type account/sort type stuff, so its like I need a transfer service which has a foot in UK and a foot in US.
- will the authorities in either UK or USA have any issues? I can prove to anyone if they got nosy where I got it from, but I don't want the transfer held up particularly.

We're not thinking of staying in US indefinitely, probably 3 years, and then basically reverse the process, sell a US house, get our downpayment back (and hopefully some more!) and transfer back to UK. There won't be any problems doing that either?
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Old May 6th 2012, 10:47 am   #2
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Default Re: Transfering money from UK to USA to buy a house

Quote:
Originally Posted by yorkshire_geek View Post
Hi. UK citizen in USA as a permanent resident.

I have approx 75k UK Sterling I want to transfer to US, works out roughly $112K USD. My UK bank is Co-op, my US bank is Bank of America.

I basically want the maximum amount of $ in my US bank, the money will mostly end up as downpayment to buy a USA home.

So:
- what's the best exchange service to produce maximum $ USD?
- I have online banking for my UK bank account, but really it is only for UK type account/sort type stuff, so its like I need a transfer service which has a foot in UK and a foot in US.
- will the authorities in either UK or USA have any issues? I can prove to anyone if they got nosy where I got it from, but I don't want the transfer held up particularly.

We're not thinking of staying in US indefinitely, probably 3 years, and then basically reverse the process, sell a US house, get our downpayment back (and hopefully some more!) and transfer back to UK. There won't be any problems doing that either?
All of the similar posts previous to this seem to result in recommendations to use a company like XE.com. Most people seem to have a good experience with them and they give good exchange rates.

If you don't feel comfortable using one of these foreign exchange specialists, for the amount you're talking about, your own bank should give a pretty competitive rate - give their international department a call, explain how much you want to exchange and ask what rate they would give you. Then get onto xe.com and see what rate they are giving.
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Old May 6th 2012, 11:32 am   #3
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Default Re: Transfering money from UK to USA to buy a house

I've no idea what the Co-op's like, but when I worked on the foreign desk at HSBC we used to shaft customers up the bum on exchange rates, so my vote's with xe or HIFX (I've used them both successfully on multiple occasions and have been very happy with them).

Remember - if you get a crap rate then that's just like throwing money down the toilet - don't do it!
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Old May 6th 2012, 2:34 pm   #4
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Default Re: Transfering money from UK to USA to buy a house

I would recommend XE.com but they normally have a limit of roughly $10k to start with. You would need to call them up and see if they would let you do it in one transfer or whether you'd have to do it in smaller transfers.

Have you declared these funds and filed a FBAR? A transfer this size will raise flags and I would recommend that if you haven't filed you correct that first before transferring the money.
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Old May 6th 2012, 11:20 pm   #5
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Default Re: Transfering money from UK to USA to buy a house

Quote:
Originally Posted by yorkshire_geek View Post
Hi. UK citizen in USA as a permanent resident.

I have approx 75k UK Sterling I want to transfer to US, works out roughly $112K USD. My UK bank is Co-op, my US bank is Bank of America.

I basically want the maximum amount of $ in my US bank, the money will mostly end up as downpayment to buy a USA home.

So:
- what's the best exchange service to produce maximum $ USD?
- I have online banking for my UK bank account, but really it is only for UK type account/sort type stuff, so its like I need a transfer service which has a foot in UK and a foot in US.
- will the authorities in either UK or USA have any issues? I can prove to anyone if they got nosy where I got it from, but I don't want the transfer held up particularly.

We're not thinking of staying in US indefinitely, probably 3 years, and then basically reverse the process, sell a US house, get our downpayment back (and hopefully some more!) and transfer back to UK. There won't be any problems doing that either?
I'm not sure that house prices are going to increase above the buying/selling costs in the next 3 years.
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Old May 7th 2012, 12:27 am   #6
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Default Re: Transfering money from UK to USA to buy a house

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I'm not sure that house prices are going to increase above the buying/selling costs in the next 3 years.
Just so long as they don't decrease, its still worthwhile, here in California, houses valued at around $550K are renting out at $2900/month, to buy you can get that sort of total monthly cost (mortgage, property tax, minus interest deductable) on a property bought over 15 years, ie. after 3 years you've bought just under 1/5th of the property. If prices increase then its good, its only if they decrease does it eat into the equity you've been slowly accumulating.

It is very strange here in peninsula of Bay Area California. In UK, for someone to buy my UK house I rent out, the mortgage is higher than the rental rates, in California it seems to be the opposite.
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Old May 7th 2012, 2:48 am   #7
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Default Re: Transfering money from UK to USA to buy a house

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Originally Posted by yorkshire_geek View Post
Just so long as they don't decrease, its still worthwhile, here in California, houses valued at around $550K are renting out at $2900/month, to buy you can get that sort of total monthly cost (mortgage, property tax, minus interest deductable) on a property bought over 15 years, ie. after 3 years you've bought just under 1/5th of the property. If prices increase then its good, its only if they decrease does it eat into the equity you've been slowly accumulating.

It is very strange here in peninsula of Bay Area California. In UK, for someone to buy my UK house I rent out, the mortgage is higher than the rental rates, in California it seems to be the opposite.
Have you factored in realtor's fees when you come to sell?
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Old May 7th 2012, 7:48 am   #8
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Default Re: Transfering money from UK to USA to buy a house

Don't forget with that much in a UK bank account your are subject to FBAR filings in the USA.
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Old May 7th 2012, 8:15 am   #9
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Default Re: Transfering money from UK to USA to buy a house

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Have you factored in realtor's fees when you come to sell?
... and the fact it might not sell for months. And cost of repairs. And nightmare tenants if they have to rent out because it won't sell - in a location 5,000 miles away, in a country you have no citizenship for.

In the current housing market, the idea that rent is money down the drain doesn't always fit, especially over a short term like three years.

If the OP is definitely returning to the UK, I think owning in the UK and renting via a reputable agency would make more sense.
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Old May 7th 2012, 2:17 pm   #10
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Default Re: Transfering money from UK to USA to buy a house

http://www.nytimes.com/interactive/b...alculator.html

the NY times buy v rent calculator will give you a good indication of the differences.
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Old May 7th 2012, 2:57 pm   #11
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Default Re: Transfering money from UK to USA to buy a house

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http://www.nytimes.com/interactive/b...alculator.html

the NY times buy v rent calculator will give you a good indication of the differences.
According to this, and using the information you have given thus far ($550k purchase price, $75k downpayment, rental price of $2,900/month) it would only be worth buying if you were staying more than 4 years at that house.

Selling a house in the US is far far more expensive than it is in the UK. We bought here in a good school area since even though that is over 4 years away for us, we know that we don't want to (and probably couldn't afford to) move in 4 years to get a good school district.
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Old May 7th 2012, 10:30 pm   #12
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Default Re: Transfering money from UK to USA to buy a house

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I'm not sure that house prices are going to increase above the buying/selling costs in the next 3 years.
Especially with how much it costs to sell a house in the US compared to buying, you'd have to be mental to buy if you intend to sell in that time frame.

As for transferring the money, xe, hifx, etc, etc as already mentioned. No worries on reporting the transfer, it is automatically done. There are still FBAR and FACTA considerations at tax time though.
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Old May 10th 2012, 3:04 pm   #13
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Default Re: Transfering money from UK to USA to buy a house

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Especially with how much it costs to sell a house in the US compared to buying, you'd have to be mental to buy if you intend to sell in that time frame.
I agree...the costs involved in selling a house here are beyond extortionate...makes your eyes water.
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Old May 10th 2012, 4:42 pm   #14
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Default Re: Transfering money from UK to USA to buy a house

I used HIFX a few months ago and was very happy with them, but it was my understanding that they were no longer in the UK-US money transfer business due to the new FATCA regs. Are there other companies out there that are still doing this?
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Old May 11th 2012, 2:48 am   #15
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Default Re: Transfering money from UK to USA to buy a house

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I used HIFX a few months ago and was very happy with them, but it was my understanding that they were no longer in the UK-US money transfer business due to the new FATCA regs. Are there other companies out there that are still doing this?
xe
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