An FHA streamline refinance gives you something you seldom get in the financial world--savings on money and time.

However, only borrowers who meet certain circumstances can get a break when refinancing a home purchase loan that was initially backed by the Federal Housing Administration.

Here are the conditions that must be met:

1. You can't be delinquent on your current FHA loan.

2. You can't take out more than $500 in cash from the refinance.

3. It must be at least six months since your current mortgage was issued.

4. You can't increase your loan amount to cover closing costs.

5. The FHA is seeking for you to lower your term or lower your mortgage interest rate -- or to accomplish both.

The FHA used to dictate that a refinance simply provides a lower payment, but the agency realized that could create a product of a false economy.

The additional costs of interest compounded over further number of years can meaningfully offset the advantages of a lower monthly payment. While the FHA allows borrowers to increase their loan term by up to 12 years, it has to be counterbalanced by a rate reduction.

While many borrowers only see the upside to this type of refinance its important to weigh in on a potential downside. With an FHA streamline refinance: You'll pay a renewed upfront mortgage-insurance premium and resume expenditures monthly on premium payments.

Make sure to weigh the pros and cons before deciding if an FHA streamline refinance is the best option for you.