If you've been thinking of refinancing your Federal Housing Administration-insured loan, now may be the time. Rates have dropped, and benefits of the FHA streamline refinancing program are many

Here's how the program works. It's designed to lower the monthly principal and interest payments on FHA loans without giving cash back to borrowers. There are two options:

1. Refinancing without an appraisal (but with a check of the borrower's credit) allows the borrower to refinance the unpaid principal balance (but no interest), minus any refund of the Mortgage Insurance Premium (MIP) plus the new MIP if it's to be financed into the mortgage. The term of the new loan is the lesser of 30 years or the unexpired term of the old mortgage plus 12 years;
2. Refinancing with an appraisal (but where the borrower's credit is not checked) allows the borrower to include closing costs and reasonable discount points to be financed in addition to the indebtedness. In order to benefit from negotiating the best loan package, it may be wise to first visit the lender holding your current FHA loan. You may be able to negotiate points and various closing costs to secure the most cost-effective package.