I agree with Anna and consult with a loan officer first to determine where you stand in financing. You want to make sure what fits in your budget and the financing options out there for you. FHA seems would be the best bet for you as Anna mentioned but there may be other options. Also a tip is to check your credit score at least once a year, here is a website where you can pull your credit report from all 3 major reporters (equifax, experian, transunion). I believe on this website https://www.annualcreditreport.com/cra/index.jsp your able to pull your credit report for free once a year.
http://www.maar.org/WHM/ . I would highly suggest that you go to a loan officer at your bank, and apply for a mortgage, immediately. There may be a fee of $35-50 but most loan officers will waive that fee. If you are considering purchasing a home, now is the time to do it. Are you not aware of the $8000 tax credit that is available until April 30th? If you purchase a car, you may get too much debt and not be able to purchase a home. A good loan officer will look at your credit, and let you know where you stand. If you have any credit issues, please contact the non-profit credit counselors listed on the welcomehomememphis.com website. If you have any other questions, please email me.
Buyer to buyer... drive old junk. A car eats a lot of money and never earns its price if new. A house, it should maintain its value (although prices could and likely will still drop from here). Do not think of a house as an investment. It is a massive expenditure. Houses eat money. Heating, shingles, furnaces, they all eat money. Sometimes they take several years away and then they can bite your wallet hard. I would rather buy a used house than a new car any day.
Generally speaking your yearly income x 3 = safe mortgage amount.
Look at the site below.
Memphis home sales are making a slight come back from the downturn, prompted by the government's tax incentives, but the over supply of homes and heavy volume of foreclosures are weighing on the market. Real estate investors are making Memphis a destination for foreclosed homes in the financial crisis. The epidemic has hurt the local economy with growing unemployment.
Lower price range home sales are improving, but the upper end of the market hasn't yet seen much movement. The expansion of the tax credit to move-up buyers should help the market to get on a course of improvement. But Memphis will have to work through a second wave of foreclosures before stabilizing, and is forecast to see average housing values slide 9.2% in 2010 (prices going down)
Does it make economic sense to buy? See with your real numbers below.
Below is a simple blog showing the basic steps in buying a house. Plain and simple explanation.
If those are helpful please look for more below. I covered several other aspects to consider when buying.
Learn about foreclosures and unemployment in your area. BOTH will affect house sales and prices.
If you find that you don't have enough established credit then you may want to get the car first and then the home later.