With the recent housing crisis many people are wondering if they should try to refinance their home into a lower rate or simply sell and walk away. Each option has its own benefits and downsides, so determining which is best really depends on your specific situation.

With refinancing you have the benefit of being able to stay where you are. Not only is moving a hassle, it’s also a fairly expensive endeavor. Staying in your current home also allows your family to stay in a familiar neighborhood with your favorite shops, schools and families around you already.

Another benefit of refinancing is that it’s possible to get into a better mortgage rate than your existing one. Plus it’s possible that your house’s value could have increased to give you a cash-out when you refinance.

One downside to refinancing however is that it is getting more and more difficult these days. Lenders today are looking very carefully at borrowers’ credit scores, credit histories and debt-to-income ratios. If your credit is less than good you may find you’ll have a hard time getting a better rate and may in fact only be offered a higher rate for a refinanced mortgage.

The other option is selling your home. If your family has experienced changes, such as children moving out or even having new additions to the family, then this could be the better option. Or even something as small as if you had a job change that resulted in a longer commute you may want to consider moving. These things all affect the quality of your life. When paired with a barely manageable mortgage it doesn’t make much sense to stay.

Selling also makes sense if you are trying to avoid an impending foreclosure. If this is the case remember to talk it over with your lender. Foreclosure is expensive for all parties involved and they’ll likely want to help you out as best they can.

But, be careful when considering selling. If you’re doing it only to lower your monthly payment you may be on the wrong track. You should also factor in the costs of moving, how long you’ll be in the new home and if the cost of living is higher in the new neighborhood.

Whichever way you’re leaning be sure to make two lists. One should have the financial pros and cons and the other the emotional pros and cons. Measure these two against one another and decide if staying or selling makes more sense for your family based on the results.