You mention you are in debt and have much credit. Your best bet is to go to a credit counseling agency where they are non-profit and do not charge you for their service. Do not pay for this kind of service. They can help you figure the monthly payment you can afford, how to protect and earn good credit ratings, and how to become financially healthy. Trust their recommendation. Then find a trusted local bank or credit union. They can help you determine what kind of property you can afford to buy. They can also tell you If you are too much in debt to afford a home.
Good luck, my friend.
PS a cheaper house is not always better, and neither is an expensive one. It all depends on the condition of the property.... more
and if anyone is interested the property could have been sold probably without going short once it was discounted at the sale. This person probably lost money doing the cash for keys instead of just selling (where they would have actually made a profit)