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Bridgewater’s New Gateway Mortgage

Bridgewater Bank recently unveiled its “Gateway” product, a conventional mortgage for homeowners with credit and/or income provability issues. It’s meant to be short-term financing (one to three years) until a borrower can qualify for better-priced long-term financing.

Todd Poberznick, AVP B2B Solutions, provided these details:

On what makes the Gateway Alt-A mortgage unique:

Three things, he says:

  1. “…We will go to smaller centres across the country that some [other lenders] may not.”
  2. We allow “revenue properties as part of the [product] line.”
  3. “Every customer has a story. We aim to listen to each customer’s full story and find a solution…(with) a simple, quick process.”

(Also notable is that Gateway can be had with a 30-year amortization, even on second homes and vacation properties.)

On how Bridgewater prices these mortgages:

“Our process is, we listen to the broker’s explanation of the deal and determine if we can make it fit into Gateway. Then we price it based on location of the property, equity, credit worthiness, term, amortization and purpose of the loan, to mention a few.”

(Side note: Bridgewater doesn’t put out a rate sheet, preferring to price deals individually after hearing the broker’s “story.” That’s fine from a lender’s point of view, but it’s a turn-off to some brokers who don’t do considerable “B” business. When hunting for alternative financing, some brokers will only start with “B” lenders who publish their rates. That helps them set early cost expectations with clients, and provides confidence that the lender is not totally out to lunch on pricing. For these reasons, most lenders should at least consider publishing rate ranges.)

On Gateway’s less publicized product:

“We have [also] launched…our Draw Mortgage program. It allows brokers to bring draw [financing] to us and then, at takeout, have the option to transfer to another lender. This is a benefit to the broker and the client as not all lenders want to get involved with draws.”

(Bridgewater’s Draw program is well-suited to helping small one-off builders get customers into homes. It’s insured by CMHC or Genworth and goes up to 95% LTV (based on land value and build cost combined). Bridgewater doesn’t finance raw land so the borrower must already own the land or make a deal with the land vendor to receive payment near the end of the build process. Purchasers must also have 15% of the project cost set aside for holdbacks and cost overruns. Complete details)

On whether Bridgewater is thinking about getting back into “A” lending in the broker channel:

“Our current mandate is to source new [broker] business in what we perceive to be an underserved market [‘B’ lending].”

Quick Gateway Mortgage Facts:

  • Max loan amount: $750,000
  • Max. loan-to-value: 80% (including fees) or 65% if stated income
  • Max. GDS/TDS: 45%/50%
  • Prepayments: 20%, once a year on the anniversary date
  • Penalty: 1%, 2% or 3% of the balance, depending on whether the mortgage is discharged in year 3, 2 or 1