The Quick Read: A jumbo cash-out refinance records a new deed of trust or mortgage, and that recording can trigger a recordation tax that grows with the amount secured. In Maryland and D.C., the tax generally falls on the new money above your old loan balance. Virginia works differently: it uses a reduced refinance schedule whose base depends on how the instrument is structured. Jumbo status does not change the rules. It only makes the taxable base bigger.
Maryland Jumbo cash-out estimate
Enter the value, the balance, and the cash wanted; choose the occupancy and the structure; the lanes, the payment, and the reserves follow.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a jumbo cash-out refinance quote.
Illustrative starting assumptions: a $2,000,000 home value in the jumbo range, a $1,000,000 current balance, a principal residence on a thirty-year fixed structure at the current Freddie Mac conforming benchmark, and property taxes and insurance estimated at typical rates for Maryland. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conforming benchmark, a market reference and not a jumbo cash-out refinance quote; a jumbo loan is priced by the lender at lock. The lanes shown are the wholesale cash-out lanes behind this page as of the snapshot date; the calculator reads each lane’s leverage, loan maximum by occupancy, cash-in-hand cap, and reserves as the lane table states them, and a Lendmire loan officer confirms the lane on the file. The cash available is the loan the lane allows less the balances paid off, before closing costs, which are not included; on most lanes a jumbo cash-out begins one dollar above the conforming limit for the county, and two lanes start at a stated dollar floor instead. The HELOC line is the line program’s combined loan-to-value ceiling applied to the same value and balance. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages.
What Recordation Tax Actually Is
Recordation tax is a government charge for recording a new loan against your home. It is not a lender fee. It is also not the same as transfer tax, which arises when ownership changes hands.
Here is the practical point. A cash-out refinance pays off your old loan and creates a new one. The new instrument gets recorded. The state, or D.C., taxes that recording based on the amount the instrument secures.
Jumbo loans do not carry their own tax rules. A jumbo loan is simply one that starts a dollar above your county’s conforming limit, which the Federal Housing Finance Agency sets each year from home-price data and adjusts for higher-cost counties. Check your county’s limit on FHFA’s lookup. A bigger loan means a bigger base for any tax on new money. That is the only link.
The cash-out portion is the part most likely to be taxed at the full rate. Everything else depends on the jurisdiction.
Key Terms Defined
Recordation tax: A tax charged when a deed of trust or mortgage is recorded, usually measured by the amount the loan secures.
Transfer tax: A tax charged when ownership of property changes hands.
New money: The part of the new loan that exceeds the payoff balance of the loan being replaced.
Original mortgagor: The borrower on the existing loan, a status that matters for the Maryland exemption.
Obligor: The person legally responsible for repaying the loan, a term D.C. uses when testing a refinance.
Instrument: The recorded document, such as a deed of trust, that secures the loan against the property.
Three Jurisdictions at a Glance
| Factor | Maryland | D.C. | Virginia |
|---|---|---|---|
| What is taxed | New money above unpaid principal | New debt above prior principal | Reduced refinance schedule |
| Key condition | Original mortgagor | Same obligor, same property | Prior tax paid on old debt |
| How to claim | Statement or affidavit | Recital, prior instrument, FP-7/C | Certify prior instrument |
| Local layers | County rules vary | D.C. only | State plus local tax |
Treat this as a map, not a quote. Rates change, and your title company has the current numbers.
Where Lendmire Fits
Lendmire is a mortgage broker licensed for consumer lending in 16 states, Virginia among them. Maryland and D.C. are not on that list. Across the wholesale programs placed there, the jumbo lanes run to loans of $5,000,000. Leverage reaches 90% on the headline lane, with cash-out set at lower leverage than purchase. Every figure is subject to lender guidelines and full file review, and none of it is a commitment to lend. Borrowers weighing a jumbo cash-out refinance program should know that recordation tax is a separate government charge. It does not change whether a loan is reviewed, but it does change the cash you net.
How a Jumbo Cash-Out Moves From Start to Finish
Here is the sequence, step by step.
1. The loan is structured as cash-out. Underwriting treats cash-out as its own transaction type.
2. The appraisal sets the ceiling. Appraised value caps the new loan. Cash-out sits at lower leverage than a purchase, and above a lane’s threshold amount, two appraisals are required. Some of the largest lanes also cap the cash you can take.
3. Title work identifies the old loan. The title agent gets payoff statements and finds the prior recorded instrument. In D.C. and Virginia, that instrument’s number matters. In Maryland, the unpaid principal balance matters.
4. The new instrument is drafted. This is where exemptions are claimed or lost. Each jurisdiction wants different wording, covered below.
5. The tax lands on your Closing Disclosure. Under federal disclosure rules, a charge based on the loan amount is shown as a transfer tax, whatever the state calls it. The CFPB’s guide to the Loan Estimate and Closing Disclosure explains that classification. Recording fees for the deed of trust appear on their own lines.
Ask for a draft Closing Disclosure early. It is the quickest way to see how the tax was computed.
Maryland: The Original Mortgagor Test
Maryland exempts a refinance from recordation tax only up to the unpaid principal of the existing loan. The text of Tax-Property §12-108 says so directly. Cash-out money above that balance is taxed like new debt.
Here is a simple illustration with no dollar figures. If your old balance is 60% of the new loan amount, the first 60% is exempt. The remaining 40% is the taxable cash-out increment. A jumbo loan makes that 40% a large number, which is why the exemption matters more at this size.
The exemption is not automatic. The original mortgagor or an agent must put a statement in the recitals or acknowledgment, or file a sworn affidavit. It must say the signer is the original mortgagor and give the unpaid principal balance.
Who counts as the original mortgagor? The Maryland State Bar Association’s guidance says it includes someone who assumed the debt on a property they bought and paid recordation tax on the price. It also covers the settlor of a living trust when the trustee signs, and a refinance by the original mortgagor together with a spouse.
Two more Maryland points:
- The tax is measured against the current principal balance, not the original loan amount. A refinance no larger than that balance owes none.
- County rules vary. Prince George’s County uses its own Finance Affidavit, and its recordation tax is based on the difference between the new loan and the unpaid balance being refinanced. State exemptions are not always mirrored for county transfer taxes.
The per-$500 county rates are not printed here. Confirm your county’s current figure with the clerk or title company.
District of Columbia: Same Borrower, Same Property
D.C. follows the same new-money logic. Under D.C. Code §42-1103, when existing debt is refinanced, recordation tax applies only to new debt above the existing principal balance. That holds if the old debt was a purchase-money mortgage or was itself taxed under that paragraph.
The procedure is strict. The D.C. Office of Tax and Revenue notice on refinances and modifications says the security instrument must state on its face that it is a refinance or modification deed of trust. It must also cite the instrument number of the prior instrument.
A law firm’s summary of the DMV rules adds two conditions. The refinance must be to the same obligor. The new loan must be secured by the same property. Adding collateral is allowed, but releasing any property that secured the old loan is not.
A completed FP-7/C form is needed to record each deed of trust. It separates the total amount, the exempt amount and the taxable amount.
D.C.’s percentage rate is not printed here because it can change over time, so check OTR for the current number. One local title company says Class 1 residential refinances may owe only the clerk’s fee with the right affidavit. That claim is unconfirmed, so verify it with OTR before counting on it.
Virginia: A Reduced Schedule, Not a Pure New-Money Rule
Virginia is the one that trips people up. The general rule in Code of Virginia §58.1-803 is a state recordation tax of 25 cents on every $100, or portion of $100, of the obligations a deed of trust secures. A reduced schedule applies to qualifying refinances.
Here is the contrast with Maryland and D.C. The statute text indicates the reduced schedule can apply to the full amount of the refinancing deed of trust where tax was already paid on the prior debt. Only supplemental, wrap-around and same-lender modification instruments are taxed solely on the increase. Some commentary says Virginia taxes only the increase on any refinance, which sits in tension with the statute. The safe description is a reduced refinance rate, with the exact base depending on how the instrument is structured. Confirm it with your title company or the clerk.
The deed of trust must certify the deed book and page, or instrument number, of the recorded instrument on which tax on the original debt was paid. The reduced schedule is also conditioned on that prior tax having been paid.
Clerks can challenge classification. In one instance, a county denied the refinance rate because the taxpayer was not the borrower on the original deeds of trust. The ruling on review reversed that, applying the plain meaning of “refinance” as paying off existing debt with new debt. The lesson is documentation. Clean paperwork heads off the argument.
Virginia once had a same-lender exemption. It was eliminated in 2012 and replaced with a reduced rate, so older rulings describing it are out of date.
Where the General Rule Breaks
These are the named edge cases worth raising with your title agent.
- Maryland, not the original mortgagor. A buyer who took the property subject to the loan, or got a new loan from someone other than the original mortgagor, may lose the exemption. Adding a spouse alongside the original mortgagor does not.
- Maryland, scope. A 2013 amendment widened the refinance exemption beyond principal residences, so occupancy does not decide it.
- D.C., different borrower or collateral. Changing the obligor, or releasing collateral, can forfeit refinance treatment.
- Virginia, tax never paid on the old loan. The reduced schedule is conditioned on prior tax having been paid.
- Trust-held homes. Maryland treats a trust settlor as an original mortgagor when the trustee signs. Other jurisdictions need case-by-case review.
- Paying off a second lien in the same transaction. Ask the title agent how each payoff is documented, since the exempt amount depends on it.
For occupancy, one sentence is enough: second homes and investment properties set their own leverage on the jumbo lanes, so occupancy decides the loan size more than it decides the tax.
What This Means for Your Decision
Recordation tax is a one-time charge. It is not part of your monthly budget, though if it is financed into the loan the balance runs higher. It does not decide whether you qualify. It does reduce net proceeds and affects cash to close.
Because Maryland and D.C. tax mainly the increment, a larger cash-out raises the tax, while a rate-and-term refinance often owes little. Virginia’s base differs, so the comparison is not the same there. A jumbo balance makes either case more visible.
Practical steps:
1. Ask the title agent which jurisdiction’s exemption applies and what documents they need.
2. Confirm the old loan’s recorded instrument number and the current unpaid balance.
3. Sign any required affidavit or recital correctly. Errors can cause rejection at recording.
4. Review the draft Closing Disclosure for the loan-amount-based tax line.
5. Compare cash-out size against net proceeds after the tax.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Lendmire’s rental HELOC recordation rules in Maryland, d.c. and Virginia covers the rental side of these same rules, which does not apply to a home you live in.
Common Misconceptions
- “Refinances never owe recordation tax.” In Maryland and D.C., the exemption covers only existing principal. Cash-out is new money.
- “Recordation tax and transfer tax are the same.” One arises when a loan is recorded, the other when ownership changes.
- “The exemption is automatic.” It needs a sworn statement, a recital and form, or a prior-instrument reference, depending on the place.
- “Jumbo status changes the tax rules.” The state or D.C. sets the tax. Jumbo only enlarges the base.
- “One rule covers all three.” The bases and conditions differ.
Frequently Asked Questions
Is the whole jumbo loan taxed?
Usually not in Maryland or D.C. The refinance exemption covers the portion up to your existing unpaid principal, and the cash-out increment is taxed. Virginia applies a reduced refinance schedule, and the base depends on how the instrument is drafted, so ask your title company.
Can I finance the recordation tax into the loan?
Often the tax is paid from proceeds at closing, and if it is financed the balance is larger. Whether financing it is allowed depends on lender policy and leverage limits, since cash-out sits at lower leverage than a purchase. Ask your loan officer how it will appear on the Loan Estimate.
What if I add my spouse to the new loan?
In Maryland, a refinance by the original mortgagor together with a spouse stays within the exemption. D.C. tests whether the obligor is the same, so changes to the borrower need review before closing. Exact terms depend on lender and investor guidelines, credit profile, reserves, and property review.
What if I overpaid at closing?
Raise it with the title company and the recording office. Virginia’s Ruling 23-49 shows that classification disputes can be resolved, and clean documentation of the prior instrument makes that easier.
Who do I ask for the current rates?
Ask your title company first, then the county clerk in Maryland, D.C.’s Office of Tax and Revenue, or the Virginia clerk. Rates change over time, so printed figures go stale.
Next Step
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
As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and home buyers in 16 states with FHA, VA, conventional and jumbo purchase and refinance loans arranged through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and the agency guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Federal Housing Finance Agency, 2026 conforming loan limit addendum
2. CFPB’s guide to the Loan Estimate and Closing Disclosure
3. Maryland General Assembly, Tax-Property §12-108
5. Ballard Spahr, Navigating Transfer and Recordation Taxes in the DMV
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: How to Do a Jumbo Cash-Out When Both Spouses Are on the Mortgage · Jumbo Cash-Out Refinance Rules for a Texas Second Home · How Texas Homestead Rules Cap a Jumbo Cash-Out Down Payment
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.