The Quick Read: The biggest New York-specific cost on a jumbo cash-out is the mortgage recording tax, and a CEMA is the main way to shrink it. A CEMA lets the new lender take over your existing mortgage, so the tax applies mostly to the new money. It helps most when you carry a large existing balance. It adds its own fees and needs your current lender’s cooperation, so weigh both sides before you commit.
Key Takeaways
- The recording tax is a government charge on the principal the new mortgage secures. A larger jumbo loan means a larger tax.
- A CEMA can cut the taxable base. It does not erase the tax on the cash-out portion.
- Lender and third-party fees are the ones you can compare and push on. The recording tax is not one of them.
- Every dollar of closing cost either reduces your cash at closing or gets added to the loan balance.
- Program details here are subject to lender guidelines and full file review. Nothing here is a commitment to lend.
What Is a Jumbo Cash-Out, and Where Do Costs Come From?
A jumbo cash-out replaces your current mortgage with a new, larger one that exceeds the county’s conforming limit. You receive the difference as cash. That limit is set by the Federal Housing Finance Agency, which also allows higher limits in high-cost areas, up to 150% of the baseline. Any loan above your county’s number is jumbo. Look up the exact figure for your county before you plan around it.
Across the wholesale programs Lendmire places files with, the envelope looks like this. The headline lane starts at a 660 decision score and reaches 90% leverage on purchases. Cash-out sits at lower leverage than purchase, and the largest lanes put a cash cap on the proceeds. Loans reach $5,000,000 on the largest lanes. Reserves, counted in months of the full payment, rise with the loan amount. Appraisal requirements scale up too, with two appraisals above a lane’s threshold amount. Each of these is subject to lender guidelines.
Those scaling items matter for cost. A second appraisal is a second bill. Larger reserves tie up cash you might have counted on. And a lender’s own charges are set by the lender. You can review them on the Loan Estimate, but this article does not state them as prices.
Lendmire’s jumbo cash-out refinance program page lays out how these lanes work in more detail.
How Is a Jumbo Cash-Out Underwritten, Step by Step?
The deal works through the same checkpoints on almost every jumbo cash-out. Knowing them shows where cost can creep in.
1. Credit and ratios. The lender checks the decision score and your debt ratios. The fixed lanes run to a 50% ratio ceiling. The adjustable lanes stop at 45%, and the interest-only lanes at 43%.
2. Appraisal. The appraisal sets the value, and value sets the maximum loan. A low value shrinks the loan and can let the lender revise costs. The Consumer Financial Protection Bureau lists a lower-than-expected appraisal as a change in circumstances that allows a revised estimate.
3. Reserves. The lender wants a set number of months of the full payment left over after closing. Larger loans need more months.
4. Title and payoff. Title work confirms who holds the existing mortgage and what is owed. In New York this step also decides whether a CEMA is possible.
5. Loan Estimate and Closing Disclosure. You get both documents. The first shows costs up front. The second shows what you pay at the table.
Why the Recording Tax Is the Big Line in New York
New York charges a mortgage recording tax when a mortgage is recorded against real property. The New York State Tax Department describes it as an excise tax on the privilege of recording. It is made up of several separate taxes. The total depends on the county and, in some places, the city. It is measured on the principal debt the mortgage secures.
So the base is the full new loan amount. On a jumbo cash-out that is a big number. The tax is a percentage of it. Rate tables by county are listed on the Tax Department’s Form MT-15. Check that form and your county clerk for the current rate. Do not rely on old memos for numbers.
One thing to be clear on: this is a government charge. It is not a lender fee. You cannot negotiate it down. You can only change the amount it applies to.
How Does a CEMA Cut the Tax?
A CEMA stands for Consolidation, Extension and Modification Agreement. Instead of paying off your old mortgage, the new lender takes an assignment of it. The old loan was already taxed when it was recorded. The new money gets recorded as a supplemental instrument. Tax then applies mainly to that new money, meaning your cash-out plus any costs you finance.
The state’s position on supplemental mortgages is that they are taxable to the extent of new debt. A Tax Department advisory opinion says a supplemental mortgage that creates no new principal debt is exempt from additional tax. Treat that as background. Ask your closing attorney to confirm how the current rules apply to your file.
The saving tracks your existing balance, not the new loan size. Picture a homeowner with a large balance left on the old mortgage who takes modest cash out. The carried-over balance is large, so the CEMA does a lot of work. Now picture a homeowner who has nearly paid off the old loan. Almost all of the new loan is new money, so the CEMA saves little. It may not be worth the added paperwork.
What Are the Trade-Offs of a CEMA?
The trade-offs are real, and they are where files get stuck.
- Your current lender has to cooperate. It must hand over the old note and mortgage for assignment. Some do this smoothly. Some do not.
- It adds fees. Assignment, processing and attorney work cost money. Weigh them against the tax you expect to save.
- It adds steps. More parties touch the file, which means more places for a delay or a missing document.
- The new money is still taxed. A CEMA lowers the base. It does not remove it.
The CEMA also has limits on what it can carry. The old loan must still be outstanding and properly recorded when the new instrument goes on. If it was already paid off and released, a CEMA is off the table. A second lien or HELOC may not be eligible to be carried along. Co-op loans are treated differently because co-op shares are personal property, so ask your closing attorney how the tax applies to your building.
Which Fees Can You Actually Shop?
Fees fall into two groups: ones you can compare, and ones you cannot. The Loan Estimate separates them. The CFPB explains that services you may shop for appear in Section C of page 2, and the lender must give you a written list of providers. You may use someone off the list if the lender agrees to work with them.
| Cost type | Who sets it | Can you shop or negotiate it? |
|---|---|---|
| Lender charges | The lender | Compare across lenders |
| Appraisal | Required by lender | Not shoppable; ask about a second one |
| Title services | Third parties | Often shoppable |
| Recording tax | New York State | No; only the CEMA or a smaller loan changes the base |
| Recording fee | County | No |
| Prepaids and escrow | Set by loan and closing date | Only through timing |
Title services are generally among the biggest shoppable items. Shop them. Also compare the Section A and B totals across lenders, since you cannot shop Section B services.
Can Costs Change After the Loan Estimate?
Yes, some can. The CFPB sorts closing costs into three groups: costs that can rise by any amount, costs that can rise by up to 10 percent, and costs that cannot rise at all. Fees paid to the lender or broker generally cannot rise without a change in circumstances. Prepaid interest, insurance premiums and escrow deposits can move. So can fees for services you shopped for outside the lender’s list.
It is also illegal for a lender to deliberately underestimate costs on the estimate. Still, treat the Loan Estimate as a baseline, not a final bill. Compare the Closing Disclosure against it line by line before you sign. If a fee changed, ask the lender for the specific reason.
How Do Costs Reduce Your Cash?
Every cost lands in one of two places. Pay it at closing and your net cash drops by that amount. Roll it into the loan and your balance rises, which raises the payment and the total interest over the life of the loan. The CFPB’s guide to the Loan Estimate and Closing Disclosure shows how the cash-to-close figure is built.
Financing costs have a second effect on jumbo files. Cash-out leverage is lower than purchase leverage, and the largest lanes cap the cash. A financed cost uses up room under that leverage ceiling. So rolling costs in can quietly shrink the cash you actually receive. Run both versions before you pick one.
Ways to Limit Costs, Ranked by Likely Impact
1. Use a CEMA when the math supports it. This targets the biggest New York line. It pays off most with a large existing balance and a cooperative current lender.
2. Take less cash. A smaller loan means a smaller tax base and smaller lender-driven charges. Ask whether you need the full amount.
3. Shop title services. Use the Section C list and compare.
4. Compare Loan Estimates. Look at Sections A and B across lenders, not just the headline terms.
5. Skip a second appraisal if you can. Two appraisals kick in above a lane’s threshold amount. A loan sized just under it may avoid the second bill. Ask a broker where each lane’s threshold sits.
6. Mind the closing date. It changes prepaid interest and escrow deposits.
7. Reconcile the final documents. Check the Closing Disclosure against the Loan Estimate and question every change.
Beware any promise of “no closing costs.” Those costs are not gone. They are built into the rate or the balance.
Is It Worth Doing at All?
A simple test: add your total closing costs, then divide by any monthly savings the new loan creates. That gives a break-even point. If you expect to sell or refinance before then, the cash-out loses money. When the goal is cash rather than savings, ask a different question: does the cash you need justify what it costs to get it? A smaller need may be better served by keeping the loan you have.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Key Terms Defined
Jumbo loan: A mortgage that starts one dollar above the county’s conforming limit.
Mortgage recording tax: A New York excise tax on recording a mortgage, measured on the principal it secures.
CEMA: An agreement that assigns your existing mortgage to the new lender so tax applies mainly to new money.
Loan Estimate: The document that shows expected costs and which services you may shop for.
Closing Disclosure: The final statement of what you pay, which you compare against the Loan Estimate.
Cash-to-close: The amount you bring, or receive, once all costs are counted.
Frequently Asked Questions
Can I roll closing costs into a jumbo cash-out?
Often yes, subject to lender guidelines. Financed costs raise your balance and count against the leverage ceiling, which can reduce the cash you receive. On the largest lanes a cash cap applies as well.
Is the New York recording tax negotiable?
No. It is a government charge set by law. The only lever is the amount it applies to, and a CEMA is the usual way to change that. Confirm current county rates with the Tax Department’s form and your county clerk.
Does a CEMA make sense on every refinance?
No. The saving follows your existing balance, and it is offset by CEMA fees and the need for your current lender to cooperate. A small remaining balance means a small benefit. If the old loan is already paid off, a CEMA is not available.
Do co-ops or condos change the costs?
Yes, they can. Co-op loans are treated differently for recording tax because co-op shares are personal property, so ask your closing attorney. Non-warrantable condominiums are accepted on two of the lanes, with their own terms.
Why do jumbo costs run higher in dollars?
Several charges scale with the loan: the recording tax, reserves, and any second appraisal. Other charges are fixed no matter the size. Reading the Loan Estimate line by line shows which is which.
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging FHA, VA, conventional and jumbo purchase and refinance loans through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
For the program’s current guidelines, see jumbo loan programs.
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References
1. FHFA: 2026 Conforming Loan Limit Values
2. Consumer Financial Protection Bureau
3. NYS Tax Department: Mortgage Recording Taxes memo
4. Form MT-15
5. Tax Department advisory opinion
6. CFPB: Which closing services can I shop for?
7. CFPB: Can my final costs increase from the Loan Estimate?
8. CFPB: Guide to the Loan Estimate and Closing Disclosure forms
This article is part of Lendmire’s Jumbo Loans series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Jumbo Cash-Out Reserve Requirements for a W-2 Earner · How Much a Jumbo Cash-Out Costs When Replacing a Low Jumbo · Jumbo Cash-Out vs High-Balance for a Homeowner Near the Limit
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.