The Quick Read: Every cash-out pays a county recording fee, but only some states and counties add a percentage tax on the new loan, and that tax is what makes the same loan cost thousands more in one county than in the next. The county office, not the lender or broker, sets these charges.
- The flat recording fee is small and barely moves with loan size.
- A loan-based tax, where it exists, scales with the amount secured, so a bigger cash-out can mean a bigger bill.
- Some places tax only the new money on a refinance. Others tax the full new loan.
- Because the charge follows the county, two properties in the same state can pay very different amounts.
- Shopping lenders will not lower it. Ask the closing agent for a county-specific quote early.
What Are the Two Buckets of Recording Cost?
Recording cost has two layers. The first is a recording fee, usually based on the number of pages filed. The second is a mortgage-based tax, charged on the loan amount in some states and counties. A consumer explainer on recording charges draws the same line: fees tend to follow pages, taxes follow dollars, and actual charges vary widely by county and state.
DSCR Cash-Out Calculator
Run the cash-out numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 8, 2026
Prefilled with starting assumptions — enter your property’s value, balance, taxes, and insurance for a more accurate picture.
Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
As of Oct 8, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Property value, balance, taxes, and insurance are editable estimates. Maximum loan-to-value varies by lender, program, property type, and seasoning. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
| Factor | Recording Fee | Loan-Based Tax |
|---|---|---|
| Based on | Pages recorded | Amount secured |
| Moves with loan size | Barely | Directly |
| Where it applies | Everywhere | Some states and counties |
| Who sets it | County office | State and/or county |
Most states have no mortgage tax, so the county fee is the only recording cost there. In the places that do charge one, the tax usually dwarfs the fee. Here’s the catch: investors budget for the small number and get surprised by the big one.
Which States Charge a Tax on the Loan Itself?
Only a minority of states charge one. PropertyShark’s state-by-state review lists Alabama, Florida, Kansas, Minnesota, New York, Oklahoma and Tennessee, plus Washington, D.C. Other lists add places like Georgia, Maryland, Virginia and Orleans Parish in Louisiana, where refinances can carry mortgage-type taxes. Publishers do not agree on a firm count, so treat any list as a starting point and confirm locally.
A quick refinance-versus-purchase point clears up a common mix-up. Transfer tax is generally a purchase cost, because a refinance has no conveyance of ownership. Georgia Title’s explainer says as much. But the new mortgage still gets recorded, and recording-type taxes still hit it. A cash-out avoids the deed tax, not the mortgage tax.
| State | Tax on the new loan? | Refinance relief? |
|---|---|---|
| New York | Yes, layered by county | CEMA, in narrow cases |
| Maryland | Yes, set by county | Yes, on the old balance |
| Florida | Yes (stamps and intangibles) | Narrow, same-lender |
| Georgia | Yes (intangible tax) | Varies by note term |
| Most other states | No | Not needed |
How Does a Cash-Out Change the Taxable Base?
The cash-out amount decides much of the tax wherever relief exists. Underwriting treats the recording line as a cost of the transaction. The tax authority treats it as a function of how much of the new loan is new money.
Run a simple indexed example. Say the old loan balance is 100 units and the new cash-out loan is 120 units.
- Maryland-style relief: the new deed of trust is exempt up to the old unpaid principal, so only the extra 20 units are taxed.
- New York with no CEMA: the full 120 units carry the tax.
- A county with no mortgage tax: neither number matters, and you pay the flat fee.
LegalClarity’s Maryland explainer gives a real version of the first case. A $250,000 balance refinanced into a $300,000 loan is taxed only on the extra $50,000. Baltimore City also notes that unpaid principal does not include interest or other costs and fees. If your payoff includes accrued interest, that part is not protected by the exemption.
This is why the size of your draw matters. Where relief exists, a smaller draw can cut the tax, and it is worth comparing the tax at two draw sizes before you commit.
Why Two Counties in One State Cost Different Amounts
The tax follows the county, not the state line. New York and Maryland show it clearly.
In New York, the “mortgage recording tax” is really several taxes. A law firm’s breakdown puts the pieces between $0.25 and $1.75 per $100 of principal, and Westchester lands at $1.30 per $100, or 1.3%. Suffolk County’s clerk lists a total of 1.05% of the mortgage amount, with basic, SONYMA and MTA components. The clerk calls it a one-time tax paid at recording, not part of property taxes. That settles a common mix-up: this is not a monthly cost.
Maryland sets rates county by county, and the formulas differ in shape:
- Baltimore City charges typically $5 per $500 of principal debt secured.
- Frederick County’s court clerk lists $7.00 per $500 of consideration.
- Cecil County publishes $4.10 per $500, rounded up.
- Prince George’s County uses $2.75 per $500 on the difference between the new loan and the unpaid balance, plus a county transfer tax of 1.4% on that same difference.
Those county sources are the reason you can’t quote “Maryland’s rate.” Counties also change their own layers. New York’s tax department has issued notices where a county adds a new tax component, which moves the combined rate. Never rely on a rate without its current source.
Multi-county properties add a wrinkle. In New York, the taxpayer may pay at the highest locality’s rate or file a form to apportion the tax by locality. For a DSCR investor holding several properties across counties, expect each file to carry its own math.
Where Refinance Relief Breaks Down
The general rule is that relief helps a refinance. The edge cases are where investors lose money.
New York CEMA. A CEMA (consolidation, extension and modification agreement) lets a new loan ride on top of an old, already-taxed mortgage, so only new and additional debt is taxed. It depends on the old lender assigning its note. A new mortgage from a different lender may not be treated as a supplemental instrument, in which case full recording tax applies. With a standard payoff to a new lender, a CEMA may simply not be available. Whether a given lender or closing agent will do one is a program question, so ask early. Lendmire covers the mechanics in its piece How Much a CEMA Cuts Recording Costs on a DSCR Cash-Out by Loan Size.
Florida’s narrow exemption. A Florida appellate opinion says refinanced loans may be exempt to the extent the lender provides no new money. For the intangible-tax exemption, the new loan must refinance the old loan with the same lender. A cash-out through a new lender typically pays on the full amount, and new money above the original loan is taxed in any event.
Investment property, not a home. County exemption language is often written around owner-occupied homes. Maryland’s Prince George’s County describes a separate clause for non-principal-residence refinances, which is the clause a DSCR file would look at. Suffolk applies a $30 deduction for one- or two-family improvements and requires a clause for properties up to six units. A 1-4 unit rental can land on either side of these lines. Confirm with the local office, and confirm how the property is titled, since entity ownership can change which clause applies, subject to program terms and local rules.
Short-maturity notes. Georgia recently raised the threshold for a long-term note from 36 months to 62 months. Standard DSCR terms run long, so this rarely bites. Verify against the statute if your note is unusual.
How Does the Tax Fit the Loan Itself?
Recording charges are government fees. They are not lender fees, and they go to the county or state, not to the lender or broker. Lenders do not set them, and comparing lenders will not reduce them.
Here is how the pieces sit inside a typical cash-out file across the network:
- Cash-out on an investment property tops out around 75% LTV (loan-to-value, the loan as a share of the property’s value) on most programs. Short-term-rental collateral generally sits lower, near 70%.
- About 6 months of ownership, measured from title recording, is the common seasoning expectation before a cash-out.
- Coverage of 1.00 is where select programs start. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted.
- Reserves are commonly around 6 months of PITIA (principal, interest, taxes, insurance and any HOA dues), stepping up to about 9 months on loans above $1,500,000. They vary by lender, leverage, and loan size.
How a recording tax gets paid, from proceeds or from your own cash, depends on the lender and the file. One practical point matters more than the label. A large recording tax reduces what you actually walk away with, so you should compare net proceeds, not just the headline loan amount. Also keep the DSCR math in perspective. DSCR compares rent to PITIA only. Clearing 1.00 is not the same as positive cash flow, and one-time recording costs sit outside the ratio entirely.
Across many files, the recording line is the item that surprises investors who budgeted off a generic closing-cost percentage. The stronger files pull a county-specific quote before the cash-out amount is locked, not after.
Old-Lien Release Costs
A cash-out pays off an existing mortgage, and that payoff has its own paperwork. The old lien gets released or satisfied on the public record, and that filing carries a county fee as well. Some old notes also carry prepayment charges. These are separate from the tax on your new loan, but they land in the same cash-out cost stack. Ask for them in the same quote.
A Pre-Closing Checklist
Run through this list before you pick a cash-out amount:
1. Ask the closing agent for the recording fee and any loan-based tax for your county, in writing.
2. Ask whether the county taxes the full new loan or only the new money.
3. Ask whether a CEMA or an exemption clause is available for an investment property, and whether your titling affects it.
4. Ask whether your payoff includes accrued interest, since some counties exclude it from the exempt balance.
5. Compare the tax at a smaller draw and a larger draw.
6. Confirm the current rate with the clerk or the state tax department, since counties can change their layers.
You can see how the broader file fits together in Lendmire’s complete DSCR loans guide. Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
Key Terms Defined
Recording fee: the flat county charge for placing a document on the public record, usually based on page count.
Mortgage recording tax: a percentage tax, charged in some states and counties, on the amount a mortgage secures.
CEMA: a New York agreement that consolidates an old mortgage with a new one so only the new money is taxed.
Unpaid principal balance: the remaining loan amount, not counting interest, costs or fees.
Seasoning: the waiting period after buying a property before a lender will allow a cash-out refinance.
Frequently Asked Questions
Is the recording cost a flat fee or a percentage?
Both exist, and they are separate. The recording fee is a modest flat charge based on pages. A loan-based tax is a percentage of the amount secured and applies only in some states and counties. Where no mortgage tax exists, the flat fee is the whole recording cost.
Does a cash-out refinance owe transfer tax?
Generally no. A refinance involves no conveyance of ownership, so the deed transfer tax is typically a purchase cost. The new mortgage can still owe recording or mortgage taxes, which is why a cash-out in the wrong county can cost far more than the same loan elsewhere.
Does a bigger cash-out always mean more tax?
Where tax follows the full new loan, yes, it rises with the loan. Where only new money is taxed, the exempt portion shields the old balance, so the extra draw is what gets taxed. Compare the tax at two draw sizes before you lock the amount.
Can I shop lenders to lower recording costs?
No. Recording fees and taxes are government charges set by the jurisdiction. They go to the county or state, so a different lender will not change them. What does vary is whether a lender or closing agent will do a CEMA or help structure the file to use an available exemption.
Where do I find my county’s actual number?
Start with the county clerk or recorder’s office, or the state tax department where the state runs the tax. Then get the closing agent’s written quote. Counties can add or change tax layers, so a number without a current source should not be trusted.
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. Reach the team at 828-256-2183 or request a quote. Every file is underwritten individually, and nothing here is a commitment to lend.
A more affordable cash-out is rarely the one with the best headline terms. It is the one in the county where the investor asked about the tax before choosing the draw.
For how equity extraction works on an investment property, see Lendmire’s guide to cash-out refinance on an investment property.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a DSCR-focused mortgage broker that helps arrange investor financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR eligibility is generally reviewed by the lender around the property’s rental income rather than personal income documentation, subject to lender guidelines — which works for self-employed investors, LLC operators, and portfolios above four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Log Home recording fees explainer
2. PropertyShark, Real Estate Transfer Taxes by State
3. Georgia Title, Georgia Transaction Taxes
4. LegalClarity, Maryland Recordation Tax Exemptions
5. Baltimore City Finance, Recordation Taxes
6. Cuddy & Feder, The Quarter Point
7. Suffolk County NY Clerk, Mortgage Tax
This article is part of Lendmire’s investment property cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Do All DSCR Cash-Out Loans Carry an Early Exit Fee? · How to Cash-Out Refinance a 2–4 Unit Rental From Start to Close · How to Document a Cash Purchase for Delayed Financing on a Duplex
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.