Your First Step to Buying a Home
Understanding Prequalification vs. Preapproval vs. Fully Underwritten Loans
Before you fall in love with your dream home, there’s one crucial step that can make or break your home-buying experience: getting your financing in order.
This isn’t just a formality. It’s what protects your deposit, strengthens your offer, and gives you peace of mind throughout escrow. In today’s competitive markets across Marin County, San Francisco, and Sonoma, having your loan fully underwritten before making an offer can be the difference between getting the keys or losing out.
Why Financing Prep Matters
Many buyers don’t realize that the majority of escrows that fall through do so because of financing issues—not inspections or negotiations.
Understanding the difference between prequalification, preapproval, and a fully underwritten loan helps you avoid costly surprises and positions you as a serious, confident buyer from day one.
Prequalification: A Quick Estimate
Think of prequalification as a snapshot of your finances—helpful for getting started, but not strong enough to make an offer with.
Here’s what it typically includes:
• Based on self-reported income and debts
• No credit check
• No documentation verification
• Provides only a rough estimate of what you might afford
Bottom line: Prequalification is a casual starting point. It’s fine for early planning, but it doesn’t carry much weight with sellers or listing agents in competitive markets like San Rafael, Mill Valley, or Santa Rosa.
Preapproval: A More Reliable Step
A preapproval means you’ve taken a more formal step with a lender. You’ve submitted an application and provided documentation so the lender can review your financial picture more closely.
Here’s what it involves:
• Verification of income, assets, and debts
• Often includes a credit check
• Provides a clearer picture of what you can actually borrow
However, your loan hasn’t been through full underwriting yet. That means it’s not guaranteed — just pre-screened.
Fully Underwritten Preapproval: The Gold Standard
This is the strongest level of buyer readiness and what serious sellers in Marin, San Francisco, and Sonoma County want to see.
With a fully underwritten preapproval, your lender has already reviewed your complete financial file:
• Credit, income, assets, and employment are verified
• The file has been reviewed by an actual underwriter
• You’re effectively “loan-approved,” pending only property details
This allows you to waive your loan contingency in your offer, which can make your offer stand out — especially in multiple-offer situations in areas like Tiburon, Corte Madera, or Petaluma.
It signals to the seller that your financing is solid and your deal is far less likely to fall apart.
How Loan Status Impacts Your Offer
When you write an offer on a home in California using the Residential Purchase Agreement (RPA), your agent selects one of three options under Section 6B—reflecting your loan status.
The stronger your loan position, the stronger your offer.
However, there’s also risk if you overstate your readiness:
If you waive your loan contingency without being fully underwritten and your financing falls through, you could lose your earnest money deposit — typically around 3% of the purchase price. That’s tens of thousands of dollars at stake in markets like Marin and San Francisco.
Final Takeaway
Before you start scheduling home tours or falling in love with properties on Redfin or Zillow, take the time to get fully underwritten with a reputable local lender.
It’s the smartest move you can make to:
• Strengthen your offer
• Protect your deposit
• Reduce stress during escrow
• Move faster when the right home appears
If you’re not sure where to start, I can connect you with trusted local lenders who know how to navigate Bay Area financing nuances — from jumbo loans to bridge loans to family-assisted purchases.
Ready to Get Preapproved the Right Way?
If you’re thinking about buying a home in Marin, San Francisco, or Sonoma County, let’s set up a quick call. I’ll walk you through what’s happening in the local market, connect you with my preferred lenders, and help you position yourself to win the home you want — without unnecessary risk.
