Now is not the time to overspend on a home.

With the economy slowly emerging from a serious recession and employers cutting wages and laying off millions of workers, you've got to be careful.

You shouldn't spend so much that you're scraping and scrimping to pay your bills every month. Nor should you devote every cent of your savings to a down payment.

Follow these 4 simple rules and you'll have little or no trouble making your mortgage payments, even if you lose your job.

Rule 1. Housing costs should be 28% or less of your gross (pretax) income.

If you're a two-income family, it's OK to consider the income from both jobs. Money you make from part-time or seasonal work is acceptable, too.

But you've also got to count all recurring expenses -- principal and interest on the mortgage, property taxes, condo or association fees and insurance.

Economists usually define an affordable home as one that costs less than 30% of your pretax monthly income.

Yet nearly 38% of homeowners with a mortgage -- 19 million people -- now spend more than 30% of their income on housing. About 7.5 million homeowners -- nearly 15% of all those who have a mortgage -- spend half of their income or more on housing.

You don't want to be one of them.

Rule 2. Total monthly debt payments should be 36% or less of your income.

Add up how much you're spending on auto loans, student loans, credit card bills, child support and loans against your 401(k) plan. The more nonmortgage debt you have, the less you can afford to spend on a home.

If, for example, you make $60,000 a year and have no debts, you can afford to spend about $1,315 a month on principal, interest, taxes and insurance without breaking the 28% rule.

But if you also spend $300 a month on car payments, $125 on credit card bills and $200 on student loans, the 36% rule would limit your monthly housing costs to $990.

It's easy to put those rules to work. Just enter your income and expenses into our 28/36 mortgage calculator, and we'll tell you how big of a loan and monthly payment you can afford.

Rule 3. Don't loot your retirement accounts for a down payment.

The substantial down payments lenders are now demanding could limit how much you can afford to borrow.

With so much of our savings tied up in retirement accounts, an IRA or 401(k) plan may be the only place to turn for that kind of cash.

But with the banking crisis battering the stock markets, many retirement plans have lost 30% to 40% of their value.

If you cash out now, you'll be locking in your losses, still have to pay taxes and penalties on most withdrawals, and hurt your chances for a secure retirement.

There's only one exception we'd make. It may make sense for you to tap a Roth IRA for a down payment.

Rule 4. Move in with a reasonable rainy day fund.

The start of a recession is no time to be living paycheck-to-paycheck.

A record number of homeowners are already suffering through foreclosure, and the loss of a job is the primary reason borrowers default on their payments and lose their homes.

Anyone buying a home must have a sensible safety net -- at least three months' and preferably six months' worth of income in easily accessible savings that can see you through a financial crisis.

Couples with two incomes need to know how they'd keep up with the mortgage payments if one of them were laid off. Singles should check into employer-sponsored or private-purchase disability insurance and otherwise determine how to handle the worst.

Financial expert and author Jordan Goodman of MoneyAnswers.com says home buyers should have at least 5% of the purchase amount as a cash cushion for unexpected repairs and expenses.

Rising energy prices will boost heating and cooling bills, and higher transportation costs will affect everything from moving costs to landscaping to repair expenses.

This isn't a bad time to buy. But it's a bad time to be overextended.

By Melissa Preddy

Interest.com Contributing Editor

Whether you're buying a home or refinancing an existing mortgage, we have a mortgage calculator that can help you make the right decisions.