Hard Money Loans
Hard Money vs Bank Loan
Two different tools for two different situations. One is priced for speed on a short hold, the other for a long hold and a fully documented borrower. Here is how to tell which one your project needs.
Our rate
Starting at 12%
Close in
As little as 24 hours
Underwriting
In house, asset-based
Last updated
The Short Answer
A bank lends against you. We lend against your property and your investment plan. That single difference drives everything else: what documents you hand over, how long it takes, what it costs, and which properties even qualify.
If you are buying a house to rent for the next twenty years and it already qualifies as-is, a bank will beat us on price and you should use one. If you are buying something distressed, or building from the ground up, or you have a closing date that will not wait on an underwriting committee, that is where we come in.
Side by Side
| Dimension | Cedar Top hard money | Conventional bank loan |
|---|---|---|
| What gets underwritten | Your property and your investment plan. We are asset-based, so the numbers on the deal carry more weight than a credit score. | You. A bank reviews your income, tax returns, debt-to-income ratio, credit history, and reserves. |
| Time to close | As little as 24 hours once title work is complete. We underwrite in house, so there is no outside underwriter or third-party appraisal to wait on. | Typically weeks. A bank appraisal, an underwriting committee, and a list of conditions all sit in the path to closing. |
| Interest rate | Starting at 12%, priced for speed and a short hold on your property. | Lower, because a bank is pricing for a long hold and a fully documented borrower. |
| Term | Short, usually months rather than decades, with interest-only payments on most of our programs. | Long, commonly amortized over 15 to 30 years. |
| Rehab funding | Built into your loan. Rehab funds are escrowed at closing and released in draws as work is completed and inspected. | Usually not available on a standard purchase loan. |
| Property condition | Distressed, vacant, unfinished, and raw land are all fundable with us. | Generally must be habitable and lendable as-is. |
| Best use | Flips, ground-up builds, bridge situations, double closes, land, and any purchase on a tight timeline. | Long-term holds and stabilized, income-producing property. |
Bank terms vary by institution, your borrower profile, and the property, so the bank column describes how conventional financing is generally structured rather than quoting rates we do not set.
What Our Side Actually Costs
We publish our pricing so you do not have to ask. Rates starting at 12%, with an origination fee of 2% to 4% and a $995 document fee. Most of our programs are interest-only with no prepayment penalty, so paying your loan off early on a fast flip does not cost you extra. The full table is on our rates and terms page. To see how those numbers stack up against other Texas hard money lenders, read our Texas lenders compared table.
To see what that means on your specific deal, run it through our hard money loan calculator or, if you are flipping, our fix and flip profit calculator. Both show your carrying cost over your actual hold, which is the number that decides whether a deal works.
Where Each One Fits
Use hard money when your project is on a clock or the property is not yet lendable:
- Fix and flip, where rehab is escrowed and drawn as work is completed.
- New construction, funded in draws from the ground up.
- Bridge loans, when you need to move before another sale closes.
- Transactional funding, for an A-B-C double close.
- Raw land and acreage, which most banks will not finance for investors.
- Commercial investment property.
Use a bank when you are holding long term, the property qualifies as-is, and you have the time and documentation for conventional underwriting. Plenty of our borrowers do both: buy and renovate with us, then refinance into a bank loan once the property is finished.
More background is in what is hard money lending and hard money loan requirements in Texas.
Hard Money vs Bank Loan FAQs
Is hard money more expensive than a bank loan?
On the rate, yes. Hard money is priced for speed and a short term, not for a 30 year hold. In exchange, we underwrite your loan in-house, skip outside appraisals and third-party underwriting, and can close in days instead of weeks. On a flip, the number that matters is your total carrying cost over the months you actually hold the property, not the annual rate by itself.
When should I use a bank instead?
When you are holding the property long term and it already qualifies as-is. If the property is habitable, your income and credit document cleanly, and you are not racing a closing date, conventional financing will almost always cost you less. We will tell you that rather than put you in a loan that is the wrong tool for your plan.
Can I refinance out of a hard money loan into a bank loan?
Yes, that is a common exit for our borrowers. Investors use hard money to buy and renovate a property a bank would not touch in its original condition, then refinance into long-term financing once the work is finished and the property qualifies. Plan that exit before you borrow, since the short term is the whole point of the loan.
Do I need good credit for a hard money loan?
Credit is one part of the picture, not the deciding factor. Your property and your investment plan carry the underwriting. If your credit is thin or bruised but the numbers work and you have a real exit strategy, contact us and let us take a look.
Apply for a Texas Hard Money Loan
We underwrite your loan in-house. If a traditional bank is the better tool for your project, we will tell you so.