I currently thinking of using 000webhost for hosting but I hear people say some bad sites are hosted with that webhost and they say it can hurt all the sites with the same ip. Is what they are saying true and should I use 000webhost or not?
You can not afford $10 per month for Hostgator? They are reliable and you will never have any problems. I was also using free hosting only to find out that it is not reliable. After choosing Hostgator payed hosting all the problems disappeared.
Hosting servers don't affect search engine rankings much, but it's always better to go with paid hosting provider if possible. You will be sure your data is safe, at least.
I wouldn't say that. Even shared hosting servers have good response time (unless you use cheapest hardware and slowest connection possible), so page load time has no real importance.