>I bring home $3200 a month and have $800 in expenses right now.

It depends on why you only have $800 expenses on $3200 income.

If you're in a two-income household with a $650 mortgage that you split and are otherwise frugal, $500 won't break you. If it's because you're living with parents, you have no "living" expenses, and $800 is all entertainment spending, it's unlikely the $500 will be continue to be affordable for the life of the loan.

That your interest rate is 13% suggests the bank doesn't think this is a good idea for you.