The Quick Read: These are government charges for putting your new mortgage on the public record. They come in two kinds: flat fees that depend on page counts, and taxes that depend on the size of your loan. The second kind is the one that grows when your cash-out grows. Whether you owe it on the whole new loan or only on the new money depends on your state and county, so ask your closing agent before you commit.
What to Know First
- A cash-out refinance replaces your old mortgage with a new, larger one. The new one gets recorded, and recording costs money.
- Flat recording fees stay roughly the same no matter how much you borrow. Loan-based taxes do not.
- Some places tax the entire new loan. Others tax only the amount above your old balance, if you qualify for the exemption.
- In many conventional cash-out files, these charges can be rolled into the new loan, but only if the total still fits under the leverage cap.
- Your lender estimates these charges. A government office sets them.
Why a Cash-Out Refinance Triggers Recording Charges
A cash-out refinance is not a modification of your old loan. It is a brand-new loan that pays off the old one. The old lien gets released, and a new lien gets recorded at the county office where land records are kept.
That recording is the event that carries the charges. Your old loan paid its own recording costs years ago. This one is a new document, so it gets its own bill.
Here is where homeowners trip up. Many assume only the new cash is “new.” Mechanically, the whole loan is new. Whether the tax reaches all of it is a separate question, and the answer is local.
If you live in a high-cost state, the loan is probably larger than it would be elsewhere. A bigger loan means a bigger tax base wherever the tax scales with loan size. That is the whole reason this topic deserves its own look.
Lendmire’s cash-out refinance programs cover conventional, FHA, VA, and jumbo paths. Every one of them ends with a new recorded lien. The charges that follow depend on the county more than the program.
The Two Buckets: Flat Fees vs. Loan-Based Taxes
Recordation charges are not one thing. They fall into two buckets, and mixing them up is a common mistake.
| Feature | Flat recording fee | Loan-based tax |
|---|---|---|
| What it pays for | Filing and indexing documents | A tax on the mortgage itself |
| What sets the amount | Page count, document type | Loan amount or a share of it |
| Grows with cash-out? | Barely | Yes, often directly |
| Who collects it | County recorder | State and/or local government |
| Appears on forms as | Recording fees | Often transfer or other taxes |
The flat fee is the minor one for most borrowers. It is small and predictable. Think of it as a postage stamp for your paperwork.
The loan-based tax is the one to watch. In some places it is split between a state piece and a local piece. In others, a lender and borrower share it by local custom. Rules vary, so take the figures from your county or state revenue office, not from a blog.
Some states charge no loan-based tax on mortgages at all. If that is your state, your recording bill is mostly the flat fee, and this article’s tax discussion is background.
Key Terms Defined
Recordation: The act of filing a document, such as a mortgage, in the public land records. The word is used in some states. Other states say “recording.”
Recording fee: A flat charge for filing and indexing your documents. It does not scale with the loan amount.
Mortgage recording tax: A tax calculated on the mortgage amount. Other names include “recordation tax,” “mortgage tax,” “doc stamps,” and “mortgage registry tax.”
Tax base: The dollar amount a tax is calculated on. For a cash-out refinance, the base may be the whole new loan or only the increase.
LTV (loan-to-value): Your loan balance as a percentage of your home’s appraised value. Lenders cap it by program.
Seasoning: The waiting period before you can refinance. It is measured from an earlier event, such as when your current loan was signed.
What Sits Inside the Taxed Amount
Say your tax applies only to the “gap” above your old balance. What counts as the gap? Three things can land in it.
1. The cash you take out. This is the obvious one.
2. Closing costs you finance. If you roll costs into the loan, the balance rises.
3. Other financed items, such as prepaid amounts folded into the new balance.
So a borrower who asks for “just a little cash” may still see a bigger gap than expected. Financed costs push the balance up. In a place where the tax follows the balance, that adds a little tax on top of the costs that created it.
Fair warning: this stacking effect is easy to miss on a first read of your estimate. Look at the loan amount line, then work backward.
Three Regimes Across States
States tend to follow one of three patterns. The table below describes the patterns without quoting rates, because rates change and differ by county.
| Regime | How the base works | What to ask |
|---|---|---|
| Flat fees only | No tax on the mortgage | What is the recorder’s fee schedule? |
| Full-loan tax | Tax applies to the whole new loan | Is there any credit for the old balance? |
| Refinance carve-out | Tax applies only above the old balance | What paperwork proves I qualify? |
Which regime you live in is a question for your title or closing agent. They compute it on every file. Ask them to name the regime in plain words before you look at the numbers.
Refinance Exemptions and Credits: Where They Break
In a carve-out jurisdiction, the logic is that you already paid the tax on your old balance. So the refinance is taxed only on the increase. That sounds simple. The traps are in the details.
- Who qualifies. Exemptions often hinge on whether you are the original borrower on the loan being replaced. Changes in who holds title, through a trust or a transfer, can complicate this.
- Paperwork. An affidavit or similar form is common. A missed form can mean a full-tax bill you did not need to pay.
- Recent purchases. If you bought recently and your first loan was not recorded the way the carve-out expects, the credit may shrink.
- Private or family lenders. The old loan may not count in the same way if it was not a traditional recorded mortgage.
None of this is something a borrower should guess at. Ask your closing agent one direct question: “Does my refinance qualify for any credit on the old balance, and what form proves it?”
Consolidation Structures (and Their Honest Downsides)
In some states, there is a workaround. Instead of paying off the old mortgage and recording a brand-new one, the old mortgage is assigned to the new lender and consolidated with the new money. In New York, for example, this is called a CEMA, a consolidation, extension, and modification agreement. Because the tax then applies only to the new money, the savings can be real.
The downsides are real too.
- It adds legal and processing work, which can come with its own costs.
- The old lender has to cooperate. Not every servicer is quick to do so, and the structure fails if the old servicer will not play along.
- It helps most when the old balance is large compared with the new cash. When the cash-out is large relative to the old balance, the savings shrink.
- Not every program or state allows it.
Here is a thinking-out-loud scenario. If the saving is modest and the extra legal work is substantial, the simpler path may win. If the saving is large, the extra work pays for itself. This one is a genuine toss-up until you see both estimates side by side. Ask your closing agent to price both.
Three Worked Examples (Hypothetical, Percentages Only)
These are modeled assumptions, not market data. No dollar figures, just shares of value.
High balance, small cash-out. Your current loan sits at 60% of your home’s value. You refinance to 70%. In a full-loan tax state, the tax base is the whole 70%. In a carve-out state, the base is the extra 10%. The carve-out saves a lot here.
Low balance, large cash-out. Your current loan sits at 30% of value. You refinance to 70%. Full-loan base: 70%. Carve-out base: 40%. The carve-out still helps, but the gap is much larger, so the savings are smaller in proportion.
No-tax jurisdiction. Same loans, but your state has no tax on mortgages. You pay recording fees only. The size of your cash-out barely changes the government charge.
Here is how the saving moves as the balance shifts:
| Your situation | Full-loan rule base | Carve-out rule base |
|---|---|---|
| Old balance high, small cash-out | Whole new loan | Small slice |
| Old balance mid, mid cash-out | Whole new loan | Mid slice |
| Old balance low, large cash-out | Whole new loan | Large slice |
The takeaway: a carve-out helps most when the new money is small compared with the old balance. As cash-out grows, the benefit fades.
What the Charges Do to Your Net Proceeds
Every dollar of government charge is a dollar you do not get to spend. If you pay the charges at closing, your cash in hand drops. If you roll them into the loan, your balance rises, and you pay interest on them for as long as you keep the loan.
Either way, the cash-out purpose has to cover them. A simple break-even check works. Add up everything the refinance costs, including recording charges. Then ask what the cash is for. If the purpose does not clearly beat that total, the refinance may not pay.
The CFPB’s report on cash-out borrowers found that paying off other bills or debts was the most common reason, followed by home repairs. Both are worth weighing against cost. Debt payoff in particular turns unsecured debt into debt secured by your home. A missed payment then puts the house at risk, not just your credit.
Can You Finance the Charges?
It depends on the program. Here is how the programs I work with across wholesale lenders treat it.
Conventional cash-out. The loan can usually include closing costs, as long as the total stays under the leverage cap. That cap is 80% of value on a one-unit primary residence, and 75% on two- to four-unit primary residences and second homes. A borrower already near the cap may have no room to roll anything in. You would pay the charges in cash.
Conventional rate-and-term. This product is built to pay off the old first mortgage, the closing costs, and a purchase-money second lien, with only incidental cash back. It reaches 95% on a one-unit primary residence. The Fannie Mae Selling Guide also lets a lender refund overpaid fees and charges required by law, which is a reason to check your final numbers carefully.
FHA Streamline. This is for borrowers who already have an FHA loan. HUD’s streamline page says closing costs cannot be added to the new mortgage amount and that only a token amount of cash back is allowed. So no, a Streamline is not a cash-out, and you pay recording charges out of pocket. HUD also describes “no cost” refinances as ones where the costs are built into a higher interest rate. The cost has not vanished. It has moved.
VA IRRRL. This refinances an existing VA loan only. It is not a cash-out product. A veteran who wants cash needs the separate VA cash-out refinance. The IRRRL carries a 0.5% funding fee unless exempt.
For jumbo files, the structure shifts again. Lendmire’s piece How to Get a Jumbo Cash-Out in Texas or Another High-Cost State covers that lane.
Reading Your Loan Estimate and Closing Disclosure
Your lender hands you a Loan Estimate early and a Closing Disclosure before closing. Recording charges live in the “Other Costs” part of both.
Here is where the two buckets split. Under the CFPB’s Loan Estimate rule, flat recording fees go on the “Recording Fees and Other Taxes” line. Taxes based on the loan amount go on the “Transfer Taxes” line. The CFPB’s own example is clear: a flat amount plus a per-page charge is a recording fee, but a fee equal to a percentage of the loan is a transfer tax.
That means two borrowers with the same government charge can see it on different lines, depending on how a lender labels it. Compare totals, not line names.
The CFPB’s sample Closing Disclosure also breaks recording fees into separate deed and mortgage lines. Do not be surprised if the mortgage line is the larger one.
A short checklist for your closing agent:
1. Which regime applies to my county?
2. Is the tax calculated on the full loan or only the increase?
3. Do I qualify for a credit on my old balance, and what form do I sign?
4. Did the estimate include that credit?
5. Is a consolidation structure available, and what does it cost to set up?
If a credit was missed, it is far easier to fix before closing than after.
Special Situations
Second homes and two- to four-unit homes. Occupancy decides leverage: conventional cash-out tops out at 75% for these, against 80% for a one-unit primary residence.
Trusts and LLCs. Title held in a trust or entity can change both who is eligible and whether a tax credit applies.
Recent purchases. On a conventional cash-out, the first mortgage being paid off must be at least 12 months old, measured from note date to note date. A borrower must also have been on title for 6 months, with exceptions such as delayed financing, inheritance, and legal awards.
Occupancy. For a primary-residence cash-out, the people on the loan generally need to live in the home.
Credit events. Waiting periods after a bankruptcy, foreclosure, or short sale are agency rules, and shorter periods may apply with documented extenuating circumstances.
Cash-Out Refinance vs. a Second Lien
A cash-out refinance replaces your first mortgage. A home equity loan or line adds a second lien and leaves the first one alone. Because the lien type changes, the recording base can change too. A small second lien may carry a smaller tax base than a full new first mortgage.
That does not make a second lien better. It has its own terms, and keeping an existing low-balance first mortgage can matter a lot. But if your cash need is modest and your first mortgage is worth keeping, price both paths. Recording charges are one line in that comparison, not the whole decision.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Weighing It Against Keeping Your Loan
Recording charges are rarely the reason to do a refinance, and they are rarely the reason to skip one. They are a cost you should see clearly before you sign. 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. Program figures are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
Frequently Asked Questions
Who pays recordation charges on a cash-out refinance?
The borrower typically pays them as part of closing costs, and they appear under “Other Costs” on your estimate. Your lender estimates them, but a government office sets them. In some places, local custom splits a tax between lender and borrower, so ask your closing agent how it works in your county.
Can I roll recording charges into the new loan?
On a conventional cash-out, often yes, as long as the total stays within the leverage cap of 80% for a one-unit primary residence. An FHA Streamline does not allow it. The loan balance grows and so does the interest you pay over time, so weigh that against paying in cash.
Do I pay the recording tax again every time I refinance?
Each new mortgage is a new recorded document, so a new charge can apply each time. In places with a refinance carve-out, the tax may apply only to the increase over your old balance. Ask whether you qualify and what proof is required.
Is a flat recording fee the same as a mortgage tax?
No. A flat fee covers filing and does not scale with loan size. A mortgage tax is calculated on the loan amount. The CFPB classifies them differently on your disclosure forms, so they may show up on separate lines.
Does a home equity line avoid recording charges?
It does not avoid them, but it can change them. A second lien is a different recorded document, and the tax base may differ from a full new first mortgage. Compare the total cost of both paths before choosing, including the value of keeping your current first mortgage.
For your own numbers, request a scenario review with Lendmire.
For current guidelines and terms, see Lendmire’s refinance programs page.
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.
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References
1. CFPB: CFPB Report Finds Cash Out Mortgage Refinance Borrowers Improve Credit Scores
2. Fannie Mae Selling Guide B2-1.3-03: Cash-Out Refinance Transactions
3. HUD FHA Streamline Refinance
4. CFPB Regulation Z § 1026.37
5. CFPB sample Closing Disclosure
This article is part of Lendmire’s Refinance series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: How to Compare Blended Cost of a Cash-Out Refinance to Pay Off Debt · How to Shorten a Cash-Out Refinance on a Second Home · How to Size a Cash-Out Refinance for a Condo Renovation
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.