How much of a home can I qualify for making 38059 a year with a monthly debt of around 500 in North Carolina?

Start with the amount of mortgage payment you can afford. Don't forget to add in insurance and property taxes. Then go to www.bankrate.com and use one of the mortgage calculators there to figure out how much of a mortgage that would cover. Don't forget that you need to have some cash saved up for a down payment.

This is the formula used by lenders:

28% of gross monthly income for MAXIMUM total mortgage payment. 8% of gross monthly income for other debt.

Your GMI is $3,209. Your MAX payment is $898. Your MAX debt is $257.

Your payment is reduced by the amount you are over on debt. $500 - $257 = $243. $898 - $243 = $655.

That $655 is the MOST you would be allowed to have. Lenders will not want to see you right at that upper limit because of your debt usage, that hurts you. Your score might be closer to 700 is your debt level was down where it should be for your income, around $200 per month.

Part of that $655 goes toward yearly property tax and homeowner's insurance, calculated per month. You can't know what those numbers will be until you find the property. But let's assume that taxes will be $100 per month and insurance $40 per month. That leaves you a MAX of $515 for principal and interest.

A 30 year loan at 4.25% on $104k is $512 per month. That is the MAX you could borrow. Realistically, with your level of debt, about $10k less, maybe even more. With your score, you might have to pay a higher interest rate.

Is that your gross or net income after taxes?

Are you paying off a debt at $500 a month or do you have monthly EXPENSES (not debt) of $500??