Should I extend myself to get the place I want or go smaller and have more money left per month?

What exactly do you plan to do with the money left per month? If you spend it, then you don't have it, so it doesn't count.

What exactly do you mean by "extend myself"? Is that the same as "going in over your head"? That is even worse than being broke because a lot of people are shouting insults at you.

You need more of a plan than you have exposed here.