1 Research your home's value. Looking at your home's tax value, online estimates at Zillow.com, or asking a real estate agent for a price opinion can help you determine how much your home might be worth. But those methods will be off 5 to 10 percent almost every time, experts say. "Off 5 to 10 percent is the difference between refinancing the house and not refinancing the house," said mortgage banker Alex Stenback. The only way to know for sure if a refinance is in the cards is to order up a $400 appraisal.

2Check your FICO credit score. It's the most widely used score in the mortgage industry. If you are concerned about your credit, buy your FICO score from one of two credit bureaus for $19.95 ($39.95 for both) at myfico.com. You can also estimate your score at the site, or at www.creditkarma.com.

3Call your current mortgage holder to see if they can offer a better deal without an appraisal and major paperwork. Compare any offer with at least one bank and credit union before ordering an appraisal. It may also pay to work with a mortgage banker who has access to multiple lenders.

4Consider the term. Many families are switching from 30-year mortgages to shorter terms. Some are even throwing cash into the mortgage at the closing table. Considering a recent Bankrate.com survey that showed only 24 percent of Americans have at least six months of emergency savings, paying the mortgage faster may not be the best choice for many. My family refinanced to a 15-year mortgage in 2010. It's working out so far, and I'm happy we'll have the house paid off before our younger kids are college-bound. But I really like Stenback's idea of starting a housing fund in a savings account that could be used for a down payment when it's time to move, a remodel or just a cash cushion.

5Create a plan for the money freed up by a lower monthly payment. Will you take the savings and throw that money back into the mortgage to reduce principal faster? Will you start saving for college or retirement or finally pay off that credit card debt? Come up with a plan. Otherwise, you risk whittling that money away with nothing to show for it.