Common questions, straight answers.

There is no single multiple of income that works here, because Katy's carrying costs are unusually front-loaded. Two homes at the same asking price can carry very different monthly payments once school and municipal utility district taxes land in the escrow account. The number that matters is what your income, your existing debts and that specific property's tax rate produce together, which is exactly what a pre-approval calculates. As a starting point, most lenders want your total monthly debts including the new mortgage under roughly 43% to 50% of gross monthly income, and automated underwriting will approve higher ratios on a strong file with reserves.

Source: Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios · varies by lender

Lower than most people assume, and there is no longer one universal floor. Fannie Mae removed its published 620 minimum for loans underwritten through Desktop Underwriter on case files created on or after November 16, 2025; the automated system now weighs the whole file rather than gating on a single number. FHA publishes 580 for 3.5% down. In practice most lenders add their own overlay above those floors, and pricing keeps improving well past them, so the score that gets you approved and the score that gets you the best rate are two different numbers.

Source: Fannie Mae SEL-2025-09; HUD Handbook 4000.1 II.A.4 · varies by lender

A pre-qualification is a conversation. You state your income and debts, and you get an estimate back. A pre-approval means an underwriter has actually reviewed your credit report, your income documents and your assets. Only the second one carries weight with a seller, and on a well-priced Katy home an offer backed by a pre-qualification frequently loses to one backed by a pre-approval. Turnaround runs from same day on a clean automated file to several days when income has to be reviewed by hand.

Source: Describes typical practice, not a published rule

3E Lending offers fast pre-approvals and can close in as little as 21 days for qualified borrowers, which is what lets you compete in a fast-moving Texas market. The timeline depends less on the lender than on how quickly the file comes together: appraisal scheduling, title work, and how fast document requests come back. Self-employed income, gift funds and anything that needs manual underwriting all add days.

Source: 3E Lending service commitment · varies by lender

It depends on the program. Conventional 97 allows as little as 3% down, FHA allows 3.5%, and VA and USDA loans can go to 0% down for eligible buyers. A standard conventional loan can be done with less than 20% down, but private mortgage insurance applies until you reach roughly 22% equity. For most buyers the down payment is not actually the binding constraint: closing costs, reserves and the monthly payment usually bind sooner, and that is a more useful conversation to have first.

Source: Fannie Mae Selling Guide B5-6; HUD Handbook 4000.1 II.A.2

Private mortgage insurance on a conventional mortgage cancels automatically once your loan balance reaches 78% of the home's original value, which is typically around 22% equity through your normal amortization schedule. No refinance and no manual request is required. You can also request cancellation at 80% once your payment history qualifies. This is a protection set by federal law rather than a lender policy, so it does not vary from one lender to the next.

Source: Homeowners Protection Act of 1998, 12 U.S.C. 4902

Yes. TSAHC and TDHCA both run statewide programs that pair a mortgage with down payment help, usually as a grant or as a second lien that is forgiven once you have lived in the home for a set number of years. Assistance commonly runs a few percent of the purchase price. Eligibility turns on income limits set by county and household size, and several programs reserve better terms for teachers, first responders, veterans and corrections officers. Because those caps are county-level, Harris and Fort Bend can treat the same salary differently, which matters in Katy because the city spans both.

Source: Texas State Affordable Housing Corporation; Texas Department of Housing and Community Affairs · varies by lender

The right answer is whichever one relieves the constraint that is actually binding for you. If credit is the obstacle, FHA is built for it. If you have strong credit and reserves, conventional is usually cheaper over the life of the loan because the mortgage insurance eventually comes off. If you are VA eligible it is almost always the strongest option on the table, with no down payment and no monthly mortgage insurance. USDA works only inside eligible rural boundaries, which around here means the areas west toward Brookshire rather than Katy itself. An adjustable rate makes sense mainly when you have a specific reason to expect a shorter hold.

Source: Fannie Mae Selling Guide; HUD Handbook 4000.1; VA Lender's Handbook M26-7 · varies by lender

FHA loans are government-insured through HUD and allow lower credit scores, down to 580, with a 3.5% down payment, but the mortgage insurance premium typically stays for the life of the loan. Conventional loans carry no government insurance, generally expect a stronger credit profile, and their private mortgage insurance cancels automatically once you build enough equity. That cancellation difference is usually the deciding factor for a buyer who plans to stay put, because FHA mortgage insurance you cannot remove is a permanent line in the payment.

Source: HUD Handbook 4000.1 II.A.2; Homeowners Protection Act of 1998

No. Eligible veterans, active-duty service members and surviving spouses can purchase with zero down payment and no monthly mortgage insurance. A one-time VA funding fee applies and can typically be financed into the loan, and it is waived entirely for veterans receiving compensation for a service-connected disability. Texas has one of the largest veteran populations in the country, so this comes up often in the Katy market.

Source: VA Lender's Handbook M26-7 Chapter 8; 38 U.S.C. 3729

When the loan amount passes the conforming limit set each year by the Federal Housing Finance Agency, currently $832,750. It is worth being precise that this is the loan amount and not the purchase price: a $950,000 home with 20% down leaves a $760,000 loan, which is still conforming. Above the limit, underwriting tightens - higher credit scores, lower debt-to-income ratios, and meaningful documented reserves left over after closing. In Katy this comes up most often in Cinco Ranch, Grand Lakes and the newer sections of Cane Island.

Source: Federal Housing Finance Agency conforming loan limits, 2026

More than buyers moving from out of state tend to expect. Texas has no state income tax and funds local services through property tax instead, and much of west Katy sits inside a municipal utility district that carries its own bond debt on top of school and county rates. Because taxes are escrowed monthly, the rate moves both your payment and the loan amount you qualify for. The municipal utility district portion generally declines over the years as the district retires its bonds, so a brand new development often carries a higher rate than an established neighborhood a mile away. Check the rate on the specific parcel before you fall in love with the house - it changes street by street.

Source: Harris County Appraisal District; Fort Bend Central Appraisal District · varies by lender

Plan on 2% to 5% of the purchase price, separate from and on top of the down payment. That covers loan origination, the appraisal, title work, and the prepaid taxes and insurance used to establish your escrow account. In Katy the escrow prepaids are the line that catches people out, because the same high tax rate that lifts the monthly payment also raises the cash you need at the table. Your Loan Estimate discloses the actual numbers for your transaction within three business days of application.

Source: Typical market range - the Loan Estimate discloses actual costs · varies by lender

It is required, not optional, if the property sits in a FEMA Special Flood Hazard Area and your mortgage is federally backed or federally regulated. Plenty of Katy homes outside those zones carry a policy anyway, particularly in the reservoir watersheds, and since Harvey underwriters look at flood exposure more closely across the whole area. Pull the parcel on FEMA's Flood Map Service Center before you are under contract rather than after: premiums vary widely enough to change what you can afford, and they are escrowed alongside taxes and hazard insurance.

Source: 42 U.S.C. 4012a mandatory purchase requirement; FEMA Flood Map Service Center

It is worth comparing rather than assuming, in either direction. Builders often attach real incentives to their affiliated lender - closing cost credits, or a rate buydown - and those can be worth thousands of dollars. What a builder cannot do is make using that lender a condition of selling you the home. The comparison that matters is total cost over the period you actually expect to hold the loan, because an incentive that offsets a higher rate looks good on a short horizon and expensive on a long one. Get the builder's Loan Estimate and an independent one, and set them side by side.

Source: Real Estate Settlement Procedures Act, Regulation X, 12 CFR 1024.2, required use

3E Lending is a licensed Texas mortgage broker based in Katy, with deep roots across the greater Houston metro - Fulshear, Brookshire, Richmond, Cypress, West Houston, Sugar Land and Missouri City all have dedicated neighborhood coverage on this site. Because the license is statewide, we can write loans anywhere in Texas, not only in the areas mapped here.

Source: Texas Department of Savings and Mortgage Lending