Hi,
These are my thoughts, and can be taken as such. You will probably find several different opinions on this issue.
First, the general condition of the mortgage industry right now seems to be that most lenders will require you to have a FICO mortgage score average of 620. You could probably find a lender if you looked around enough, and if you have enougn of a down payment, to lend to you with lower scores than that, but that's about what the norm seems like right now. I don't know if you would have a larger down payment, because you are asking about ways to get a loan to pay off a debt. But here's the thing--opening a new tradeline can hurt your credit. Also, some lenders will not want to see a customer with a low credit score take on additional new credit after getting the initial approval---you could actually find yourself in a spot where they change their mind on the approval and deny you a mortgage because of the new account on your credit.
My personal opinion is that I am generally against taking on one debt to pay another, but a lot of that depends on the situation. Lowering interest rates, for example, is a good thing. That said, I don't know the specifics of your situation, and what kind of debt/how much/what the interest rate is/etc, so I'm just speaking generally.
Now, this being said, the "subprime" market is returning.....because the lenders learned nothing, and investors are chasing every $$ they can get their hands on. So, there have been some cases of people with FICO scores in the low 500s getting approved for mortgages---but be very careful--the mortgage product that is available to this tier of credit customers is likely to be very predatory, with terms that are not good for the buyer at all. I would caution you to be VERY VERY careful about these products...do your homework and shop around for the best deal you can get.
