Refinancing a mortgage is an important step that requires consideration, research and patience. There are nearly as many loan modification scams as there are legitimate lenders today. Keep reading to learn how to decide which refinancing option is best.Calculate BenefitsThe first step is to decide whether or not a refinance will actually save money. Don't always rely on lenders to disclose this information. If they can make money on the deal, they will try their best to make it work. The best way to figure out if a refinance is affordable or not is to use the simple calculator at Bankrate.com.Review Credit HistoryObtain a free credit report copy from AnnualCreditReport.com.This is the only site that is completely free and trustworthy. Be sure to check the option to also receive free scores. Review all negative items, dispute erroneous charges and try to pay off old collections if they're large. The key idea is to lower the debt-to-income ratio.Compare Financing RatesNot all refinance loans are the same. It's imperative to compare the different terms and rates available. After understanding credit scores and history, it's easier to know what interest rates to expect. Compare the cost of a 30-year refinance against a 15-year option. While it's beneficial to choose a 15-year option, it's even more important to ensure the payments are affordable.Compare Financing OptionsDepending on the current type of mortgage, there may be more options available. For example, homeowners who have Freddie Mac or Fannie Mae loans qualify for an underwater refinance. This means that if borrowers owe more than the home's current value, they may still qualify for a refinance. Always check with the original lender before choosing another one. Some lenders have special programs for their borrowers. If the original lender's terms aren't favorable, contact all of the major banks. Examples include Wells Fargo, Chase, Bank of America and US Bank. Ask for information about their refinancing options. To prevent the chance of falling victim to scams, avoid unknown lenders.Make An Educated DecisionThere is no quick way to understand the complexities of refinancing. One of the best factual guides for popular refinancing questions is offered by The Federal Reserve Board. Read the information carefully before making a decision. Be prepared to complete a massive amount of paperwork after choosing a lender. Since there has been a recent influx of refinance fraud, lenders are performing rigorous research to verify each applicant's information. Don't sign the loan documents until all of these steps are finished.