The time to refinance is when rates have dropped enough to save you money. The harder question to answer is: how do you know when the rates have dropped enough so you can do just that?

Crime scene investigators often resort to fingerprint dust and UV lights to find the information they need. Fortunately, your task in finding a great rate on your refinance mortgage isn't nearly as complicated.

Too much information, too little time

The Internet is one of the most used tools for researching mortgage interest rates. But if you've ever worked through this process, you know how time-consuming it can be. You can click through dozens of sites and browse numerous tables, charts, and articles-and still leave your computer feeling like your questions haven't been answered.

Thankfully, refinance rate research is a skill that can be honed. Try these tips to make your search more accurate and efficient:

• Check for points. Points are upfront charges that are essentially prepaid interest; when you pay more in points, your loan rate is lower. Refinance mortgages are often structured with one or two points (one point is equal to 1 percent of the loan balance). Since points affect the loan rate, you can't directly compare the stated rates of two mortgages that have different points; you have to use the APR metric instead. (Keep reading for more information on APRs.)
• Compare APRs. APR stands for Annual Percentage Rate; it's the cost of borrowing, inclusive of points and other upfront costs. The APR metric makes it easier for you to compare two mortgages that are structured differently. For example, a $200,000 refinance with a 6 percent fixed rate and $2,500 in points and upfront charges has an APR of 6.116 percent. But a $200,000 refinance with a 5.95 percent fixed rate and $5,000 in points and upfront costs has an APR of 6.181 percent. In this example, the 6 percent mortgage is actually cheaper.
• Watch for adjustable rates. Adjustable-rate mortgages (ARMs) are not directly comparable to fixed-rate mortgages (FRM), even using the APR metric. This is because the APR for an adjustable-rate refinance is calculated on the ARM's opening rate. Because that rate changes, this APR number isn't particularly useful. There's one exception however: If you're certain that you'll sell the home before the rate changes, you could use an ARM's APR for comparison purposes. But if there's any chance that you won't sell the home before your first rate reset, don't put too much emphasis on the ARM's APR. Instead, consider the potential for rate increases and how those increases might fit within your budget. To compare the costs of an ARM versus a FRM, use a mortgage calculator designed specifically for that purpose.

You don't need high tech equipment and a fancy lab to figure out what's going on with mortgage refinance rates. Just rely on reading the fine print and being careful to compare your options on an equivalent basis.