Hard Money Loans
Hard Money vs Bank Loan
Two different tools. One is priced for speed on a short hold, the other for a long hold and a documented borrower. Here is how to tell which your deal needs.
Our rate
Starting at 12%
Close in
As little as 24 hours
Underwriting
In house, asset-based
The short answer
A bank lends against you. We lend against the deal. That single difference drives everything else: what documents you hand over, how long it takes, what it costs, and which properties are even eligible.
If you are buying a house to rent for the next twenty years and it already qualifies, a bank will beat us on price and you should use one. If you are buying something distressed, or building from dirt, or you have a closing date that will not wait on an underwriting committee, that is our side of the line.
Side by side
| Dimension | Cedar Top hard money | Conventional bank loan |
|---|---|---|
| What gets underwritten | The property and the deal. Asset-based, so credit matters less than the numbers. | You. Income, tax returns, debt-to-income, credit history, and reserves. |
| Time to close | As little as 24 hours. We underwrite in house with no outside underwriter and no third-party appraisal to wait on. | Typically weeks. Appraisal, underwriting committee, and conditions all sit in the path. |
| Interest rate | Starting at 12%. Priced for speed and a short hold. | Lower. Priced for a long hold and a fully documented borrower. |
| Term | Short. Months, not decades. Interest-only on most programs. | Long. Commonly amortized over 15 to 30 years. |
| Rehab funding | Built in. Rehab is escrowed at funding 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. | Generally must be habitable and lendable as-is. |
| Best use | Flips, ground-up builds, bridge situations, double closes, land, and anything on a clock. | Long-term holds and stabilized, income-producing property. |
Bank terms vary by institution, borrower, and property, so the bank column describes how conventional financing is structured rather than quoting rates we do not set.
What our side actually costs
We publish our pricing rather than making you ask. Rates starting at 12%, with an origination fee of 2% to 4% and a $995 document fee. Most programs are interest-only with no prepayment penalty, so paying the loan off early on a fast flip does not cost you extra. The full table is on the rates and terms page.
To see what that means on a specific deal, run it through the hard money loan calculator or, if you are flipping, the fix and flip profit calculator. Both show the carrying cost over your actual hold, which is the number that decides whether a deal works.
Where each one fits
Use hard money when the deal 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 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. The trade is that we underwrite in-house, do not order outside appraisals or third party underwriting, and can close in days instead of weeks. On a flip, the cost that matters is the cost over the months you actually hold the property, not the annual rate.
When should I use a bank instead?
When you are holding the property long term and it already qualifies. 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 less. We will tell you that rather than write a loan that is the wrong tool.
Can I refinance out of a hard money loan into a bank loan?
That is a common exit. 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 the exit before you borrow, because the short term is the point.
Do I need good credit for a hard money loan?
Credit is one input, not the deciding one. The property and the deal carry the underwriting. If your credit is thin or bruised but the numbers work and you have a real exit, that is a conversation worth having.
Not sure which one your deal needs?
Send us the property and the numbers. If a bank is the better tool we will say so.