Many holders of home-equity loans and lines of credit are benefiting greatly from the string of recent Fed rate cuts. Since home-equity rates are often based on the prime rate — which drops every time the federal funds rate is cut and now sits at 6% vs. 7.75% in September — interest payments on many home-equity products have fallen.

The not-so-good news, as some homeowners are finding out, is that it’s more difficult to get approved for one of these loans lately. As they have with first mortgages, many lenders have tightened their underwriting guidelines on home-equity loans and lines of credit in recent months, often requiring that borrowers have higher credit scores and a larger amount of equity built up in their homes.

In many cases, homeowners who do qualify can’t get as big of a loan as they once could have.

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