What to know before refinancing

Besides abundant equity and a good credit score, lenders will also want you to be able to document your employment, income and assets. Lenders have abandoned the practice of offering loans without verifying this information.

If you meet all of those requirements, it's time to start shopping for a loan.

Borrowers can either work with their current lender or find a new one.

Be aware that sticking with the original lender may be easier and less expensive. The lender may not need a new property appraisal, a title search or other items that would normally be required on a new loan. That lender should also be willing to offer a better price because it's easier and more cost-effective to keep a good customer than it is to spend marketing dollars finding a new one.

That said, it never hurts to check out the competition. Start shopping by comparing local and national rates on Bankrate.

If you do decide to shop around, make sure that you do all your shopping within a 30-day time frame so as not to ding your credit score with too many inquiries.

Thanks to the plan from the Federal Reserve to buy up mortgage-backed securities, rates are lower and the refinance business is booming again. For homeowners who qualify, now may be the time to trade in that old mortgage for a better one.