There is a fast and easy way to lower the payments on your existing FHA mortgage. It will not take money out of your pocket for closing costs. There is no appraisal required. As long as you've made your existing FHA mortgage payments there is no credit qualifying. You don't even have to be working and making an income to get it.

An FHA Streamline loan option is already built into your existing mortgage. One feature it offers is that you can get a new lower rate loan, if it is available, without reappraising your property. You just need to take the step to contact an approved FHA lender to get the details and see what it could mean to you in monthly payment savings. You will have a new mortgage process to go through, but it is abbreviated since there is no appraisal involved. On the mortgage application the sections that relate to income, assets and debts do not need to be completed. The full process should easily be wrapped up in less than 30 days.

You will not get cash back from this loan. This program is designed strictly to lower payments. This is a benefit that is given to the mortgage payer to make it easier to continue mortgage payments as time goes on. The amount of the new loan will be the lesser of either the original loan amount or the existing debt. The original loan amount is the amount of the loan at the time you took out the present FHA mortgage. Existing debt can include the current loan amount, closing costs, reasonable discount points and prepaid expenses necessary to close a new loan. The upfront mortgage insurance on the loan to be paid off is subtracted out of these calculations. These two options are only available to you if you occupy the home as your residence.

If you have an FHA loan on an investment property, even if you originally lived in it, you will only be eligible to refinance the current mortgage balance. All closing costs and pre-paids will be paid out of pocket at escrow. You will not be able to add these costs to your new loan.

An appraisal could be done in processing the loan. If the formulas above do not pencil out, you may need to establish a higher current value to avoid out of pocket expenses at escrow. This gives flexibility provided the property has appreciated. The credit qualifying portion is still waived.

With the increase in mortgage rates over the last year, some people who have existing FHA ARM mortgages may be concerned that their annual rate adjustments could be climbing. You can use the FHA Streamline program to switch to a fixed rate FHA mortgage as long as the new rate is no more than two percent more than the current rate on your loan. If you feel that for your circumstances it would be better to go from a fixed rate to an ARM the new rate needs to be two percent less than the rate on the current loan.

So many people over the years have become homeowners by getting an FHA loan. At the time of purchase of a house an FHA loan gave all the features that made it an attractive alternative to other loans. Expanded qualifying, competitive rate and low out of pocket expenses turned renters into buyers. Now as time has passed, if you have a high rate that needs to be refinanced, FHA may again be the way to go to save money as the best option.