The Quick Read: Recordation costs on an FHA cash-out refinance come from recording the new mortgage with the county, plus any state tax charged on that new mortgage. In a few states, a tax based on the loan amount is the biggest government line on the file. It is usually figured on the whole new loan, not only the cash you take out. Those charges, the 80% cap and the financed insurance premium all shrink the cash you actually receive.
What Does “Recordation Cost” Mean on a Cash-Out Refinance?
Recordation cost is shorthand for the government charges triggered when the new mortgage is put on the public record. A refinance creates a new note and a new mortgage. The old lien gets released and the new one gets recorded. Government charges attach to that recording.
Three different charges get mixed together here, and the mix-up causes most of the confusion on these files.
| Charge | How it is figured | Applies on a refinance? |
|---|---|---|
| Flat recording fee | Per document or page count | Yes, in every state |
| Mortgage recording or doc stamp tax | Percentage of the amount the mortgage secures | Only in states that levy it |
| Transfer tax on a sale | Based on sale price | Generally a purchase item, not a refinance item |
The CFPB describes government recording charges as fees paid to state and local agencies for legally recording the deed, mortgage and related documents. They show up in Section E on page 2 of the Loan Estimate and Closing Disclosure. Recording fees depend on the document, not on your loan size. A mortgage tax is different. It scales with the loan.
Here’s the catch. A state may call its charge a “recording tax,” but if it is based on the loan amount, it generally gets itemized as a tax rather than a flat fee. Read the line items on your Loan Estimate instead of trusting the label.
How Is an FHA Cash-Out Loan Built, Step by Step?
The loan is built from the appraisal down. Each step affects how much room is left for government charges.
1. Eligibility screen. The home must be your principal residence. Across the wholesale programs Lendmire places FHA files with, the cash-out reaches 80% LTV on a home owned and occupied for 12 months before the case number is assigned. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
2. Appraisal sets the ceiling. The 80% cap applies to the appraised value. A light appraisal lowers the maximum loan before any cost is counted.
3. Existing liens use up room. The cap is a combined figure. A second lien that stays on the home takes space from the same 80%.
4. Loan size build-up. The new loan pays off the current mortgage, covers any financed costs, and delivers the cash to you. The upfront mortgage insurance premium, 1.75% of the base loan, is financed on top.
5. The new mortgage gets recorded. The settlement agent collects the flat fees and any state mortgage tax, then sends the mortgage to the county recorder.
6. Disclosure. The charges appear on your Loan Estimate and again on the Closing Disclosure, with transfer taxes itemized apart from flat fees.
Nothing in that build is a surprise except step 5. It is the only line that changes dramatically by address.
Why Does the 80% Cap Matter for Recording Costs?
The cap matters because every dollar of cost competes with your cash. HUD Mortgagee Letter 2019-11 lowered the FHA cash-out maximum from 85% to 80% of adjusted value. The letter notes the cap had earlier dropped from 95% to 85%. Old figures still circulate online. Anyone quoting 85% or 95% for a new FHA cash-out is working from history.
Because the ceiling is fixed by the appraisal, financed costs do not create extra room. If a state tax is rolled into the loan, it eats into the amount available to you. If you pay it at the table in cash, your proceeds stay larger, but you bring money to a loan meant to give you money.
How the financed premium interacts with the cap is a file-level detail. The lender’s review settles it, and the Loan Estimate shows the resulting numbers. Ask for that breakdown before you commit.
Which States Charge a Tax on the New Mortgage?
A handful of states levy a tax on recorded mortgages. Treat that as a starting list, not a complete one. Rules change, and the title or settlement agent is the right source for your county.
Two states show how different the mechanics can be.
New York. The mortgage recording tax has several components, plus local city or county taxes. The total depends on where the property sits, and the state lists rates on Form MT-15, described in the New York Tax Department’s bulletin on the mortgage recording tax. For a one- or two-family home, the first $10,000 of principal is excluded from the additional tax, per a state tax memo.
Who pays which piece matters. The “special additional tax,” often called the quarter point, is generally the lender’s obligation on mortgages secured by six or fewer residential units. The borrower generally pays the basic and additional pieces, according to Cuddy & Feder’s overview of the tax. So a single “combined rate” quoted to a homeowner overstates what the homeowner pays.
Florida. The Florida Department of Revenue taxes the mortgage with a documentary stamp tax, set per $100 of the debt the mortgage secures. A separate nonrecurring intangible tax also applies to the recorded mortgage. They are two charges, not one. The state page is older, so confirm current rates with your title agent before relying on any figure.
Lendmire’s related piece Florida FHA Cash-Out Closing Costs for High-Cost State Owners walks through that state’s file in more detail.
Not every high-cost state is a tax state. Some have high flat fees, attorney requirements or title costs instead. The cost level and the mechanism are separate questions.
Is the Tax Figured on the Cash I Take Out, or the Whole Loan?
In a standard refinance, the tax is generally figured on the whole new mortgage. The new loan secures the entire balance, not just the cash-out slice. That surprises owners who assume only the equity they pull out is taxed.
Picture an owner with a modest balance who borrows up to the 80% cap in a mortgage-tax state. The new mortgage secures the payoff plus cash plus financed costs. The tax follows that total. Two owners taking the same cash can face different tax bills if one carries a much larger existing balance.
Exceptions exist, but they are narrow and state-specific.
- New York CEMA. A Consolidation, Extension and Modification Agreement assigns the existing mortgage to the new lender and consolidates it with the new money. That can let the tax apply mainly to the difference. It adds attorney and bank work, and it depends on the old servicer cooperating. Whether an FHA-insured cash-out can be closed this way is a lender-by-lender question. Do not assume it is available. Ask your loan officer at the start.
- Florida “new money” litigation. A recent First District Court of Appeal opinion in a lender’s refund case found most refinances were renewals, so only new money was taxable. It concerned a lender’s claim. It is not a rule you can count on at your closing. Treat it as a question for your title agent.
- NYC co-ops. The tax attaches to a mortgage on real property, so co-op share loans are generally outside it.
What Else Sits in the Closing-Cost Stack?
Recording charges are one slice. A cash-out file carries several categories, and only some move with the state.
| Category | Examples | Moves by state? |
|---|---|---|
| Lender and broker | Origination-type charges | No |
| Third-party | Appraisal, title, settlement | Somewhat |
| Government | Recording fees, mortgage tax | Yes, strongly |
| Prepaids and escrow | Taxes, insurance reserves | By county |
| FHA insurance | Upfront and annual premium | No |
The FHA premium is the same everywhere. The upfront premium is 1.75% of the base loan, and HUD’s FHA Resource Center confirms it applies to purchase and refinance loans. The annual premium runs between 0.15% and 0.75% of the balance depending on term, loan amount and LTV. On a thirty-year loan above 90% LTV, it lasts for the term. At or below 90% LTV it ends after eleven years. These are program facts, subject to lender guidelines and full file review, not advertised prices.
Cash-out files tend to sit above 75% LTV, so the premium structure deserves a close read on the Loan Estimate.
Can You Pay Recording Costs From Proceeds or Finance Them?
Usually the costs come out of the loan in one of two ways. Either the settlement agent deducts them from your proceeds, or they are rolled into the loan amount. Either way you pay them. You just pay through a smaller check or a larger balance.
Rolling costs in raises the balance, and the financed upfront premium and the annual premium raise the monthly obligation. Paying cash at closing keeps the balance lower. Which route is allowed depends on the 80% cap and the lender’s review. The point for planning is simple: the number to watch is net cash after all government charges, not the headline equity.
Consider a scenario where an owner needs a specific sum for a project. If the cap leaves little room, a mortgage tax that gets financed can push the net below what the owner needs. Running that math before ordering the appraisal saves a wasted file.
A loan-amount-based tax also changes the case for borrowing more than you need. Every extra slice of principal carries the tax.
What Are the Edge Cases?
Several situations break the general rule.
- Case-number vintage. Case numbers assigned before September 1, 2019 could reach 85%, per HUD’s letter. That matters only for old files.
- Section 247 Hawaiian Home Lands. This is the one exemption from the 80% cap in the HUD letter.
- Section 203(k) refinances. Rehab loans follow their own guidelines.
- No-cash-out refinances. Streamline and rate-and-term loans have no cash proceeds. The FHA Streamline refinances an existing FHA loan with no appraisal and a net tangible benefit. The FHA rate-and-term with an appraisal reaches 97.75% on a principal residence occupied for the previous twelve months. Government charges still apply to the new recording, but the loan amount is typically smaller, so a percentage-based tax is smaller too.
- Rentals and second homes. Standard FHA cash-out is for a principal residence only. Occupancy decides the leverage.
The comparison with other cash-out options matters in high-tax states. A home equity loan or second mortgage is a separate lien and may carry its own recording charge. A second lien also counts against the combined cap on a later FHA refinance. Lendmire’s piece Texas FHA Cash-Out Fee Cap Rules for High-Cost Closing States shows how a different state’s fee structure changes the same file.
Where Do Owners Get Tripped Up?
Five misunderstandings show up again and again.
- “A recording fee and a recording tax are the same.” They are different categories. One is flat. The other scales with the loan.
- “I only pay tax on the cash I pull.” In a standard refinance the whole new mortgage is taxed, barring a structure like a CEMA.
- “The borrower pays all of New York’s tax.” The lender generally covers the quarter point on small residential mortgages.
- “FHA cash-out goes to 85% or 95%.” Those are history. The cap is 80% for newer case numbers.
- “Florida’s doc stamps and intangible tax are one charge.” They are separate taxes.
Tax treatment of any of these charges can depend on your situation. Borrowers should speak with a qualified tax professional before relying on any deduction or credit.
How Do You Verify Your Own Number?
Do not rely on a state average. Your county, loan size and structure set the real figure.
1. Read the Loan Estimate. Look at Section E on page 2 for recording charges and transfer taxes. Mortgage tax lines are usually itemized separately from flat fees.
2. Ask the settlement agent. The title or settlement agent collects the tax at closing and files the mortgage with the county. That person knows the current rate for your property.
3. Check the state source. New York borrowers can look at the current Form MT-15. Florida borrowers can check the Department of Revenue’s rate pages. Older rate tables, including those in some state memos, may no longer be current.
4. Compare against the Closing Disclosure. Once you receive the disclosure, take the time to compare it with the estimate, since the timing of delivery relative to closing can vary by file and lender. The CFPB says recording fees can change by no more than 10% in total at closing, together with certain other settlement services. It does not state a tolerance for transfer taxes, so do not assume one.
5. Ask about structure early. In a mortgage-tax state, ask whether any consolidation approach is possible on an FHA file before the appraisal is ordered.
Lendmire arranges FHA loans through wholesale lenders in 16 states, and the FHA cash-out refinance program page covers how the cash-out reaches 80% on the appraised value. Program figures are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
Key Terms Defined
Recordation. The act of filing a deed, mortgage or related document in the public land records.
Mortgage recording tax. A state or local tax figured on the amount a recorded mortgage secures.
Documentary stamp tax. Florida’s tax on a mortgage, set per $100 of the debt secured.
CEMA. A New York agreement that consolidates an existing mortgage with new money, so the tax applies mainly to the difference.
Adjusted value. The appraised value HUD uses to apply the loan-to-value cap.
Upfront premium. The 1.75% FHA insurance charge on the base loan, financed into the balance.
Frequently Asked Questions
Are recording fees negotiable?
Flat government recording fees are set by the county and are not negotiable. Third-party charges around them, like title and settlement work, can sometimes be shopped. Compare the Loan Estimate line by line and ask your agent which items are fixed.
Is a mortgage tax the same as a transfer tax?
No. A transfer tax is generally charged on a sale and based on the price. A mortgage tax is charged on the new mortgage and based on the amount it secures. A refinance usually triggers the second, not the first.
Do I pay the tax again if I refinance again?
Generally yes. A new mortgage is a new recorded document, so the charges apply again in a state that taxes recorded mortgages. A CEMA-type structure can reduce the amount in New York, but it is not a given on every FHA loan.
Can the charges be rolled into the loan?
Often, but financing them raises the balance and uses up room under the 80% cap. That leaves you less cash. Whether it works on your file depends on the appraisal, existing liens and the lender’s review.
Does an attorney state cost more on a refinance?
It can, because attorney-state closings add legal fees, and some also have local recording or tax charges. The size of the gap depends on the state and county, so ask for an itemized Loan Estimate.
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 (NMLS# 2371349) is a mortgage brokerage serving homeowners and home buyers in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
For the program’s current guidelines, see FHA loan programs.
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References
1. CFPB: What are government recording charges for a mortgage?
2. HUD Mortgagee Letter 2019-11
4. Cuddy & Feder’s overview of the tax
5. Florida Department of Revenue: documentary stamp tax
6. HUD FHA Resource Center: mortgage insurance premium structure
This article is part of Lendmire’s FHA Loan series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: FHA Cash-Out Requirements vs What an FHA Streamline Allows · FHA Cash-Out Doc Stamps and Closing Costs in Miami-Dade · How to Pay Off Debts at Closing on a Texas Homestead FHA Cash-Out
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.