You must have saved SHSH blobs for the iOS version you want to restore to. Example – iOS 7.0 or 6.1.2 (which are not being signed currently as iOS6.1.2 is out). They are supposed to be locally stored on your computer.
You must have proper IPSW for the desired iOS for your iPhone/iPad/iPod Touch model.
Download iFaith from HERE
Go to C:WindowsSystem32driversetc and open the hosts file with notepad. If any of these lines are there, remove them.
There are two methods of creating a Signed IPSW. Using iFaith and using Redsn0w.
Or you can watch the YouTube video bellow to get on screen instructions –
Click Build *Signed* IPSW w/Blobs button.
Now browse to the saved shsh and select the shsh blob for iOS 5.1.1. If you saved shsh using TinyUmbrella, they are saved in C:UsersUser Name.shsh directory. Blobs saved by iFaith have .ifaith extension while TinyUmbrella saves shsh in .shsh extension. You can use any of these.
Now browse for the stock IPSW. Note that iFaith does not support custom IPSW (redsn0w does).
After selecting the IPSW, it will show credits and is ready to build the signed IPSW for you.
Click Build IPSW button and it will start building signed IPSW.
In order to use the signed IPSW (or any custom IPSW for tha matter), you need to enter Pwned DFU mode. We will use redsn0w here.
Run redsn0w and click Extras. Then click Pwned DFU button.
Now connect your iDevice to your computer and Power it off.
Click Next button and follow steps shown in redsn0w to enter Pwned DFU mode.
Once in Pwned DFU mode, you are ready to restore using signed IPSW.
Open iTunes. It will say it has detected iPhone in Recovery mode. Click OK.
Now press and hold the Shift key on your keyboard and click restore in iTunes. Release Shift and browse to the signed IPSW. If you used iFaith, it will be on your desktop and if you used redsn0w, it will be in the same folder from where you provided the IPSW to redsn0w.
You now have successfully restored your iDevice back to iOS 5.x version from iOS 6 and above.