NeigborWorks, a national network of 4,500 communities, provides financial support, technical assistance and training for community revitalization, redevelopment and growth and recognizes the changing real estate market as an opportunity for buyers to take more time to examine key components of home financing.

Once considered too soaked in "froth" the housing market is about to get a taste of "frost" conditions according to a recent Freddie Mac forecast.  The organization also recently noted that home price appreciation has slowed to it's lowest point since 1999.

Likewise, the National Association of Realtors reported to Congress that housing prices are expected to fall this year as sales drop 8 percent this year, followed by another 2 percent decline in 2007.

The organization of communities offered three basic but crucial mortgage questions home buyers should consider before signing on the dotted line.

ARMs can give you more financial leverage during any initially lower rate period of the loan and that could help you qualify for a mortgage you might not have landed otherwise. It may also help you qualify for a larger loan. However, eventually, your monthly payment could rise with changing market conditions, which are now changing with an upward trend.

If you choose an ARM you must learn not only the initial rate, but when and how often the rate can adjust, how high it can adjust during each adjustment period and how high the rate can adjust over the life of the loan.

Things get even more dicey if the ARM comes with interest-only payments, payment options, a piggy-back second mortgage or other high-leverage features.

Typically, a borrower receives a lower rate if he or she agrees to not pay the mortgage off before a specified period, usually three to five years. Borrowers should ask how much money they are saving by accepting a mortgage with prepayment restrictions.

Edwina Baniqued