Owners looking to borrow against the value of their homes, especially more expensive ones, may find lenders less receptive than before.

Commercial bankers are viewing new business involving home equity credit lines more cautiously these days, according to a recent survey of lender practices conducted by the American Bankers Association (ABA). Commercial banks account for about half of equity line business, with $50.8 billion worth of credit outstanding, the ABA said.

An equity line gives the owner of a house, condominium, cooperative, mobile home or farm access to thousands of dollars worth of equity in a home, depending on its value. The loan is secured by a lien against the property, so a borrower stands to lose the home if the loan is not repaid.

The study of 620 commercial banks nationwide found that about one-fifth of them plan to tighten their lending standards this year, while nearly a quarter already did so last year.

Declining property values and uncertainties about borrowers' ability to repay in the midst of an economic downturn were among the reasons given for the lending crackdown.

Signet Mortgage Corp., which the ABA said is the largest equity line lender in the Washington area, is considering lending proportionately less of a property's value on homes in the $300,000 and up range, said President Virginia W. Smith. At present the company will lend money up to 80 percent of a home's value, but is contemplating dropping that to 70 percent or less for higher-priced homes.

"Those houses are not moving and there is a better chance of losing value in those homes as the market slows," Smith said. "The carrying costs, if we do foreclose, are also significantly higher to us."

Signet is also casting a wary eye on applications from self-employed homeowners. Unless an applicant can show strong liquid assets , the lender also intends to restrict the amount of the credit line, Smith said.

Shearson Lehman Mortgage, which originates equity lines nationally by telephone, is starting to see a drop in responses to their ads in the Washington market, said Elizabeth Pearson, vice president of marketing for the Newport Beach, Calif.-based firm.

"Our borrowers {decide not to seek an equity line} when things get tough and don't call {for more information or an application}. We get immediate feedback on how a market is doing that way," she said.

If the value of residential real estate continues to deteriorate here, Pearson said the firm could treat Washington in the same manner it has the New York and New England markets by decreasing the size of the credit line it is willing to extend from 80 percent to 75 percent of a home's value.

New England lender Donald Grigley, senior vice president of Connecticut National Bank in Hartford, said he sees this trend toward tighter lending standards "moving right down the coast" to the Washington area. Grigley also serves as a national ABA spokesman on consumer credit matters.

Besides a softening economy and declining real estate values in some areas of the United States, recent regulatory changes are also making equity lines less attractive to lenders, Grigley said. "The concern now is for safety and soundness rather than expansion," he said.

Despite lender anxieties about the product, losses on home equity loans remain relatively low. At the end of June, only 0.75 percent of all active equity line accounts were 30 days or more past due, according to the ABA.

Smith reported that Signet's delinquency rate for Virginia loans is running at a scant 0.3 percent.

For the most part, equity line borrowers make ideal credit risks. According to the bankers association survey, such loan customers are in their prime income-earning years of 35 to 49, with a smaller but substantial segment in the 50 to 64 age range.

They are well paid, with about three-fifths of the households reporting incomes in the $30,000 to $70,000 range. In most cases, two breadwinners contribute to the household income.

These consumers also have had time to accumulate equity to borrow against. The majority of equity line customers have owned their homes five years or more.

Moreover, equity line customers approach their borrowing privileges conservatively. Customers at the largest banks, for example, took out average credit lines of $38,000 but had withdrawn only about 52 percent of that money, according to the survey.

Nor are borrowers putting their home up as collateral for frivolous purposes. The ABA study shows that most borrowers are using equity lines to finance home improvements and consolidate debts.

Grigley said he has confirmed this observation by reviewing three year's of canceled checks written against equity credit lines. Even when the stock market collapsed in 1987, he reported, only a handful of borrowers used the accounts to cover margin calls.

Equity lines have replaced other types of consumer loans, lending officials said, as borrowers come to realize it is the product that offers them one of the few tax shelters left.

This year 10 percent of the interest paid on car loans, credit card debt and other consumer loans can be written off against taxable income. Next year, even that will disappear. Home equity loans, however, remain 100 percent deductible in most instances.

Nationally, the typical lender is charging a variable rate of interest of 2 percentage points over the prime rate, now 10 percent, according to the survey. Washington-area borrowers, however, are getting a better deal at 1.5 percentage points over the prime rate index, Smith said.

Competition for home equity line business remains strong. Sixty-eight percent of the largest banks last year waived their settlement fees on such loans or reduced interest rates for the first few months of their loans, up from 39 percent the year before, the study said.

Signet has already doubled its loan volume this year over last, Smith reported. In Maryland, lenders are starting to waive closing costs, she said, whereas Virginia lenders made such offers during the first rush of equity line business in 1986 and 1987.

Although Washington area competitors continue to waive the cost of closing services such as appraisals, recording fees, title searches and title insurance, that could soon change, Grigley said.

The cost of making these loans is going up, he said, because of increased federal disclosure requirements that went into effect last November. The recent federal regulation of appraisers for loans of $50,000 and up will also add to costs, he said.

Closing costs in the Washington area are about $600 to $650 per equity line, Smith said.