First-time homebuyers face multiple challenges even before they get the house keys: getting approved for a mortgage, finding the right agent, searching for the perfect home and staying within a budget.

With planning, they can avoid mistakes that might jeopardize a deal.

Many decide to buy when they feel ready for a mortgage. But just because they can afford mortgage payments doesn't mean they can afford a home, says New York attorney Rafael Castellanos, a managing director at Expert Title Insurance. "They have an idea of what their mortgage payment is going to be, but they don't realize there's much more to it."

Property insurance, taxes, home-owners association dues, maintenance, and higher electric and water bills are some of the costs first-time homebuyers tend to overlook.

"Keep in mind property taxes and insurance have a tendency of going up every year," Castellanos says.

Home buying doesn't begin with home searching. It begins with a mortgage prequalification. Often, first-time buyers "are afraid to get prequalified," says Steve Anderson, owner of Re/Max Benchmark Realty in Las Vegas. They fear the lender may tell them they don't qualify for a mortgage or they qualify for a loan smaller than expected. "So they pick a price range out of sky and say, 'Let's go look for a house.' "

That's a backward approach, says Ed Conarchy, a mortgage planner at Cherry Creek Mortgage in Gurnee, Ill.

"You get pre-approved, and then you find a home," he says. "That way you'll make a financial decision versus an emotional decision."

He also advises thinking of the house as a long-term commitment. "If you have to switch jobs in a year or two and may have to move for the job, you should think twice," says Conarchy. "Ideally, you should picture yourself living in that house for five to seven years."

If you're new to the home-buying game, you'll need a reputable real estate agent, a good loan officer or broker and perhaps a lawyer.

First-time buyers generally should not try to deal directly with the listing agent, Anderson says.

"If you are getting divorced, are you going to go to your husband's attorney for help? Of course not," he says. "Same here. If you go to a listing agent, he is only going to show you his listings. You must find a buyers' agent to help you."

If you hire an agent without a referral from friends or family, ask the agent to provide references from previous buyers. The same goes for loan officers or mortgage brokers. It's crucial to find a professional who will give you "truly independent advice," Conarchy says.

Sometimes that means hiring a lawyer, says Castellanos.

Spending all or most of their savings on down payment and closing costs is one of the biggest mistakes first-time buyers make, Conarchy says. "Some people scrape all their money together to make the 20 percent down payment so they don't have to pay for mortgage insurance, but ... they are left with no savings at all."

Home buyers who put 20 percent or more down don't have to pay for mortgage insurance when getting a conventional mortgage. That's usually translates into substantial savings on the monthly payment. But it's not worth living on the edge, says Conarchy. "I'd take paying for mortgage insurance any day over not having money for rainy days."

Now, you've prequalified for a loan and found a house. The contract is signed, and the closing is in 30 days. Don't celebrate by buying furniture or a car. In this tight lending environment, lenders pull credit reports before the closing to make sure the borrower's financial situation has not changed since the loan was approved. Any new loans on your credit report can jeopardize the closing.