When you apply, explain your plans to the loan officer. A pre-approval can be based on meeting criteria, such as paying off credit debt and/or present mortgage. You will need to show the lender a likely selling price for your home, not the optimistic one, and the balance of your mortgage(s).
So, yes it is possible and even common.
Again, contact a mortgage professional. They know the ins and outs of the current laws and you are under no obligation to use them, even if you receive information from them. In otherwords, do not be afraid to call as an inquiry.