When the bank takes the property, they’ll eventually auction it off to recoup the money they loaned you.Banks will rarely loan up to the full appraised value of the property because they want to take into account variables such a bad appraisal, damage to the property, or a drop in the housing market, etc.Banks will sometimes make exceptions with your primary residence (up to 100% LTV), because people will typically do whatever it takes to avoid being kicked out of their own home.

But after weighing all the variables (economics, standard of living, landlord headaches, growth, etc.), I found myself house-hacking a two family in Bayonne. 

The rate is variable based on Libor, currently at 3.89%.

I know there are a lot of variables that would go into making this decision but I have a decent amount of savings built up and I was just looking for some advice.

Keep in mind that there will be variables which will affect this number, i.e.: garage, yard, pool, etc...

Obviously comparable homes in the area and different variable costs will drastically change this, but I mainly want to know if this is something I should even be considering.

That being said, as the yield curve steepens, variable based rates indexed to shorter maturity notes have the potential to stay much lower for quite some time with the Fed having more influence on these than longer term notes.

The variables, and the control of them, live on the left. 

What is happening now is a combination of many variables.

The loan officer gave me the other option of doing a purchase line of credit with a variable interest rate, as an alternative to finance the whole thing.