Renting Existing Home / Purchase New

[Jason Stephens]

Good Afternoon. 

Ok Guys, this is my scenario.  

I am going to include my real scenario with as many specifics as possible so I can get the most detailed advice, I could use it. 

I am 35 years old (today) and my wife and I have two kids. I am the sole provider for my family, and currently am bringing in around $209k. We have an existing home with a $430k mortgage, of that I still owe $370k. The house can appraise and sell for probably $650k. I have $50k in a HELOC and $50k in CC debt. My current credit score is 650.

My wife and I want a larger home for our family to expand.  The neighborhood where we live has homes that range from $800k - $1.2 million.   Right now I am paying $1300 or so a month in CC's, so moving would free me from that burden and allow me to put the money towards a mortgage payment.  My existing payment is around $3200 a month, so I am thinking I can afford $5k-6k per month when all is said and done. 

Here are some of the things going through my head:
1. Does it make sense to try and consolidate the CC / HELOC down so my CC's don't have maxed out balances and it will raise my CC score.

2.  If i wanted to rent my house, I can get $3500 a month which would cover my costs. Are there any creative ways to use the equity in my existing house to keep / rent / buy a new house?

3.  What is the best way to get qualified for a mortgage?  With my existing scenario and credit score, I don't want to go through a nightmare scenario of being turned down.  Any good suggestions?

Thanks for the help!