As the agents said, if you qualify for both mortgage balance of you current home and planned loan amount of your new home based on your current debt and income, then you are all set.
If not, you can
1) reduce your debt, like car payment, credit card balance
2) if you plan to rent out the current home after purchasing a new home, consider move out now and rent it out. The rental income will increase your income and hopefully cover the mortgage, the property and HOA (if any). Make sure you have a lease for document and show the receipts of rents.
As answered by Shane the qualification depends on many factors and as a mortgage broker he has listed those items that you need to assess.
The best approach to take at this point is talk to a lender who will evaluate your finances and can then advise what you will qualify for.
A: Not if the income you have to qualify with can qualify for both mortgage payments.
It'll depend on a lot of factors, such as:
1. How much your income is
2. How much the payment on the existing home is (principal, interest, taxes, insurance)
3. How much your consumer debt payments are
4. How much you are looking to finance/sales price/down payment
5. If the home that the $122k mortgage balance is on is currently your primary residence or a rental
6. If it's a rental if you've claimed rental income and/or have a renter in there
7. If it's your primary residence, how much equity you have in the home, and where you are buying your new home
8. If you would need to use rental income from the home with the $122k mortgage balance on it to qualify
However there is nothing specifically that says you MUST sell your home before you can buy another one, people own many homes and can continually purchase new homes, the key is if you are using financing for them you must qualify for the financing you are applying with - like I just went over above.
If you need more info or have questions please let me know.