Qualify for million dollar mortgage but about to get 30% paycut.

[Orlando Goodon]

So I'm on the fence about buying a house now while I qualify for whatever I want. I was looking at duplex or Condo for rental income. My only goal is I want to at least make enough money on my own to live for free. I want to remove my cost housing costs. So right now, I'm paying $1400/month for  a roof over my head(rental). So I want to either:

Find a Duplex where the tenant pays the mortgage (completes my initial goal)
Find a Condo where maybe it cuts my housing costs down to $1000 or less (Would only be first step towards eventually living free)

I live alone with no dependents. I have enough saved to pay rent for a year, plus $15k or so for a deposit, but that leaves me with no money. With high unemployment, I worry about preserving my savings, unless I can convert them into an asset that pays me enough to not worry so much about loosing work.

Is there any sensible logic to getting approved for a larger mortgage than the bank would give you? Let's say you qualify for $500k but you had a something like say a job benefit where you could get a $700k mortgage. Would that be a blessing or a curse? Would you ever want to get a larger mortgage than the bank is offering you or do they max you out at a number that actually serves you financial interests? Does the bank today now know whats best for you?

There may be something I have not considered. Just wondering if I should make my move now.

BTW, looking within an hour of NYC. NJ most likely. I can get 100% (100% finance means any under million dollar duplex or Condo BUT hefty mortgage so DANGER if empty and I have to pay mortgage alone!) financing or 5% down (5% down means condo only).