Refinancing your mortgage can lower your monthly payments—sometimes by hundreds of dollars—to free up cash for other expenses. Even if you refinanced within the past couple of years, rates may have fallen enough since then to rethink your options.

But refinancing also costs money—with closing costs averaging about $4,000 on a $200,000-year mortgage—and may not be an option if you have little equity in your home or a low credit score. Here's how to determine whether it's worthwhile, and how to get the best deal:

Do the math. Pinpoint how much a new mortgage will trim your monthly payments, and then determine how many months' worth of those savings you'll need to cover the cost of refinancing. If you plan to move relatively soon, then refinancing may not be worthwhile. Use the "Am I Better Off Refinancing" calculator to run the numbers.

Boost your credit score. The higher your score, the better the rate you'll qualify for—you'll generally get the best rates if your FICO credit score is at least 740, and you may have a tough time qualifying to refinance if your score falls below 620. Before applying for a new mortgage, get a free copy of your credit report at AnnualCreditReport.com and check it for errors that might impact your score. Keep your credit-card balances low in the months before you apply for the mortgage, which can also help your score.

Boost your equity. You usually need at least 20 percent equity in your home to avoid having to pay for private mortgage insurance (PMI). And having more equity may help you qualify for a lower rate. If you're near a cut-off, you may want to add some more money to your equity to get a better rate or avoid PMI.

Pick the best term. The rates for 15-year mortgages are slightly lower than they are for 30-year mortgages, and switching to a shorter-term mortgage may appeal if you're about to retire and want to be mortgage free when you do. But you lose some flexibility when you shrink your mortgage term—your monthly payments will be higher. If you're not sure whether the payments on the 15-year mortgage will continue to be affordable, consider choosing a 30-year mortgage but make extra payments to the principal in months when you have extra money.