Question about Hard Money and a traditional bank loan?

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Im a new investor and I'm wondering if I use a hard money from a private source and it's not reported on my credit can I tell a bank that I own the property free and clear and get a traditional bank loan and then pay off the hard money lender and use the traditional bank loan? Or do I have to tell the bank that Im paying a mortgage from a HML? I want to do everything legal and not commit fraud so I was curious. I talked to an investor and they told me I could tell the bank I own the property get a bank loan pay off the HML then pay the lower interest rate on the traditional bank loan.