Hard Money Basics
Hard Money vs Bank Loan: The Real Differences
No jargon and no sales pitch. This is how we explain it at the Averlend desk, with the math that matters.
Hard Money Basics
The short version, then the substance.
Key Takeaways
- What each one underwrites
- Speed, paperwork, and certainty
- When to use which
What each one underwrites. A bank underwrites you: credit, income, ratios, history. A hard money lender underwrites the deal: collateral value, equity, and exit. That single difference explains everything else, including why banks are slow and hard money is not.
Speed, paperwork, and certainty. Banks need 30 to 60 days and a file cabinet of documents, and approval can still die in committee. Hard money needs the asset details and closes in days. When a seller wants certainty, the faster close wins even at a lower price.
When to use which. Use the bank for long holds on stabilized property, where their cheap rate compounds in your favor. Use hard money to acquire, renovate, and reposition, where speed creates the equity the bank will happily refinance later.
The South Texas angle. Averlend underwrites this every week in San Antonio and across Bexar County. If you are working a deal in Alamo Heights or anywhere else in the metro, the theory above comes with a local desk attached: see our San Antonio lending page or send the deal directly.
Questions
Quick answers from the Averlend desk.
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