Your New Best Bet for a Mortgage: Credit Unions

NEW YORK (TheStreet) -- Shopping for a mortgage? Be sure to check the offerings from credit unions, which are issuing loans at a record pace and are often approving applicants shunned by banks.

During the first nine months of 2012, credit unions approved 60% more mortgages than in the same period a year earlier, an all-time record, according to Callahan & Associates, a credit union research firm based in Washington, D.C.

Credit unions have evolved over the years to offer a wide range of mortgages, car loans, personal loans, student loans and checking and savings accounts -- even things such as ATMs.

And if you don't work for a company that has a credit union, don't give up, as many credit unions have opened their doors pretty wide. You may find one that will admit you based on your occupation, religion, military service or affiliation with some organization -- an affiliation that can be satisfied with a small membership fee. Some credit unions require only that you live in the county where the credit union operates.

A tip: Don't be discouraged if the credit union's name suggests it's only for certain people, such as county employees. Many credit unions have kept their old names even as they've eased membership restrictions.

Credit unions are nonprofit organizations owned by their members, and thus often charge lower fees than for-profit banks owned by investors. And this is not a niche industry -- credit union have nearly 94 million members and assets totaling more than $1 trillion, according to the National Credit Union Administration, a federal agency.

Bankingmyway.com's mortgage search tool often finds that credit unions offer the lowest mortgage rates, or the best combination of rates and fees.

If you have a credit union at work, start there. If not, check out any of the numerous credit union search tools on the Internet. The National Credit Union Administration has a tool on its site. The Credit Union National Association, a trade group, also has one online.

Is there a downside? People seeking routine banking services such as checking and savings accounts may find the nearest credit union open to them doesn't have many branches or ATMs (though some offer ATM services. But when it comes to a mortgage, convenience need not be a big consideration, as there's rarely a need to visit the branch office after the loan is approved.

As with all mortgages, it's important to look at the big picture and not become fixated on the loan rate. Application fees and points, or upfront interest charges, can have a big effect on a loan's cost. And be sure to ask how long it is taking to get a loan approved.