The Quick Read: On a cash-out refinance, recordation costs are government charges, not lender fees, and they usually track the new debt you add rather than the whole loan. D.C. taxes a recorded deed of trust as a percentage of the debt it secures. A refinance can limit that tax to the amount above your old balance. Your title or settlement agent confirms how the Recorder of Deeds treats your file.
What Are Recordation Costs on a Refinance?
A recordation cost is the charge to put your new mortgage (in D.C., a deed of trust) into the public land records. Two things get bundled under that name. One is a flat recording fee. The other is a recordation tax based on the debt.
Cash-out refinance estimate
The starting figures are an example value with a balance and a cash request in proportion. Replace them with yours.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a cash-out refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $193,000 current balance, the agency cap on a one-unit principal residence, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. 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 conventional benchmark, a market reference and not a cash-out refinance quote; a cash-out loan is priced by the lender at lock. The cash available is the loan the program cap allows less the balances paid off, before closing costs, which are not included. The HELOC line is the 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.
Neither goes to your lender. Both are set by the District. On your Loan Estimate and Closing Disclosure, they sit under “Taxes and Other Government Fees.” A federal form guide for those documents lists recording fees first and transfer taxes second.
Here is the part people miss: a mortgage is hit by the recordation tax only. The transfer tax belongs to deeds changing hands in a sale. You are not selling, so it generally is not your bill.
This article uses D.C. as one worked example. The agency rules for cash-out loans are national. The recording charges are local, and your jurisdiction will differ.
How Does a Cash-Out Refinance Work Before Recording Happens?
Recording is the last step. The loan has to be classified and approved first. A cash-out refinance is a new first mortgage that pays off your existing mortgage and hands you the leftover equity, which you can use for any purpose. Fannie Mae’s Selling Guide defines it that way.
Across the wholesale programs Lendmire arranges consumer loans through, a conventional cash-out refinance reaches up to 80% of the home’s appraised value on a one-unit primary home. It reaches 75% on two- to four-unit primary homes. That percentage is the loan-to-value ratio (LTV): the loan balance divided by appraised value. Here are the checkpoints, subject to lender guidelines and full file review:
1. Application. You apply and receive a Loan Estimate that shows the government charges as a line item.
2. Seasoning check. The first mortgage you are paying off must be at least 12 months old, counted note date to note date. A borrower must also have been on title for six months. Delayed financing, inheritance and legal-award exceptions exist.
3. Appraisal. The value sets how much equity you can reach.
4. Underwriting. The lender reviews credit, income, ratios and the property.
5. Recording package. The title agent prepares the new deed of trust and the D.C. tax form, then records them.
Lendmire’s cash-out refinance programs page lays out how these lanes compare.
How Does D.C. Tax a Cash-Out Refinance?
D.C. taxes the debt secured by the new instrument, and on a refinance the taxable base can be only the new debt above your old principal. That is what D.C. Code § 42-1103 provides. The statute sets the percentage. This article leaves the figure to the code and your settlement agent, because the Recorder decides which treatment applies to a given file.
In plain terms, picture a home with an existing taxed loan. You refinance and borrow more. The cash-out increment is the slice most likely to be taxed. A plain rate-and-term refinance with no added debt should look very different.
That treatment is not automatic. It depends on documentation. The District’s tax notice on refinances and modifications says the instrument must state on its face that it is a refinance and must cite the prior instrument. If the claimed credit is not substantiated, tax can be imposed on the full outstanding balance of the existing debt.
That is a big swing. The same refinance can be taxed on a slice or on the whole balance, and paperwork decides which.
What Flat Recording Fees Come on Top?
Separately from the tax, D.C. charges a flat fee to record the instrument. The Recorder of Deeds FAQ lists $150.00 to record any deed of trust, mortgage, modification or amendment. The fee does not grow with your loan size.
A separate tax form, the FP-7/C, goes with each deed of trust. It splits the amount exempt from recordation tax from the amount subject to it. The title agent files it for you, so rely on your settlement agent for the current version of the form.
Where Does the Money Come From?
You can pay these charges at closing or roll them into the new loan. Fannie Mae lists financing closing costs, points and prepaid items as an acceptable use of cash-out proceeds. Rolling them in raises the balance, which raises the amount counted toward your LTV. Under a cash-out ceiling, that matters.
Here is a simple way to see it. Keep the home’s value fixed. Every government charge you finance eats a little of your available cash, because the ceiling applies to total debt. Pay the charges out of pocket and you keep more of the equity you pulled.
A larger balance also means a somewhat higher payment, and interest accrues on the added amount for the life of the loan. Weigh that before you finance every fee.
Which Refinances Skip the Cash-Out Tax Logic?
Not every refinance is cash-out, and the difference changes the recordation math. These are the edge cases to know.
| Refinance type | Cash back? | Recording effect |
|---|---|---|
| Conventional cash-out | Yes, any use | New debt above old principal is the tax focus |
| Limited cash-out (rate-and-term) | Only incidental | Little or no new debt, so a smaller base |
| FHA Streamline | Capped at $500 | New instrument still recorded |
| VA IRRRL | None | New instrument still recorded |
Rate-and-term. In the wholesale programs Lendmire brokers, this is a limited cash-out loan on a one-unit primary home, and it carries a higher leverage ceiling than true cash-out does. It pays off the first mortgage, closing costs and a purchase-money second, with only incidental cash back. Mortgage insurance applies above 80% LTV. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
FHA Streamline. This requires an existing, current FHA loan and a net tangible benefit. Cash back is capped at $500, and closing costs cannot be rolled into the new loan. A “no-cost” streamline is typically funded through a higher rate, so someone still pays the recording charges.
VA IRRRL. This is VA-to-VA only. The VA’s home loans page confirms you need an existing VA-guaranteed loan. A VA borrower who wants equity needs a VA cash-out loan, which is a different product.
Even on a streamline there is a new security instrument to record. Whether D.C. tax applies, and on how much, turns on how much debt is new. Ask your title company. For a related look at government-backed loans, see Lendmire’s piece FHA Cash-Out Refinance Recordation Costs in Maryland, D.C. and Virginia.
Where Does the General Rule Break?
Several situations change the outcome. Run through them before you assume your bill looks like someone else’s.
- Different borrower. Adding or removing a borrower is a reason to ask first. The conditions for refinance treatment are set in the District’s notice, and the Recorder decides how they apply to your file.
- Prearranged refinancing. Fannie Mae bars a limited cash-out loan if you did a cash-out refinance with a note date 30 days or less before applying on the same property.
- Delinquent taxes. Real estate taxes more than 60 days past due can be paid from a cash-out loan if an escrow account is set up, subject to law.
- Recent purchase. Delayed financing may let you take cash out within six months of buying.
- Wrong exemption. D.C. has a reduced recordation rate for first-time buyers and a purchase-money exemption. Both are for purchases. They do not apply to your refinance.
- Texas. If your home were in Texas, a homestead cash-out would be limited by the state constitution, and some wholesale lanes are not written there.
What Do Borrowers Get Wrong?
“It’s a lender fee.” It is a government charge. Compare lenders on their own fees and third-party fees. For the same home, the District’s charges should look similar from one lender to the next.
“The tax hits my whole new loan.” Not necessarily, as covered above. But unsubstantiated paperwork can push it there.
“A streamline means no closing costs.” Those costs are built into the rate or the balance.
“Cash-out is the same everywhere.” Agency rules are national. Recording charges are local.
On deductions, tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
How Do You Estimate Your Number?
You cannot get a final figure without your settlement agent, but you can frame it. Work through this list:
1. Find your current loan’s payoff balance.
2. Decide the new loan amount, including any costs you will finance.
3. Subtract the old balance from the new amount. That gap is the likely taxable base.
4. Ask the settlement agent which percentage and which credits the Recorder will apply.
5. Add the flat recording fee.
6. Compare the result with the Loan Estimate, then again with the Closing Disclosure.
Ask the agent three things. Will the instrument be marked as a refinance and cite the prior loan? Is the existing debt eligible for the credit? Does anything about the borrowers on the loan change the treatment?
If your home is large enough to push the new loan past the conforming limit, the jumbo lanes take over and the recording math scales with the bigger debt. Lendmire’s piece How Much Recordation a D.C. Jumbo Cash-Out Refinance Carries covers that case.
Key Terms Defined
Recordation tax: A District charge on the debt secured by a mortgage or deed of trust when it is recorded.
Deed of trust: The security document that pledges your home as collateral for the loan. It is what gets recorded in D.C.
Loan-to-value (LTV): The loan balance divided by the home’s appraised value, shown as a percentage.
Seasoning: The minimum time you must have held the home or the existing loan before a lender will allow cash out.
Net tangible benefit: A measurable gain, such as a better loan structure, that a streamline refinance must show.
Frequently Asked Questions
Do I pay the D.C. transfer tax on a cash-out refinance?
Generally no. A mortgage or deed of trust is subject to the recordation tax only. The transfer tax applies to deeds in a sale. Your title agent confirms how the Recorder treats your specific file.
Can I roll recordation costs into the new loan?
Yes, in most conventional cash-out files. Fannie Mae lists financing closing costs as an acceptable use of proceeds. The added amount counts toward your LTV ceiling and increases your balance, so financing costs reduce the usable cash.
Does a rate-and-term refinance cost less to record than cash-out?
Often, because a limited cash-out loan adds little or no debt above the old balance, which shrinks the taxable base. You still pay the flat recording fee and still need the refinance paperwork done right.
Does the first-time buyer break apply to my refinance?
No. The reduced rate and the purchase-money exemption come from purchase notices. They are not refinance tools, so do not count on them.
Why might my Closing Disclosure differ from my Loan Estimate?
Transfer taxes appear lumped on the Loan Estimate and itemized on the Closing Disclosure, and final charges can shift once the package is prepared. Compare the two line by line and ask the settlement agent about any change.
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, subject to lender guidelines and not as a commitment to lend. For D.C. specifically, the recording line is one of the few closing charges you cannot shop, so pin it down with your settlement agent early.
For your own numbers, request a scenario review with Lendmire.
For current guidelines and terms, see Lendmire’s refinance programs page.
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.
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References
1. Federal form guide to the Loan Estimate and Closing Disclosure
2. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
3. D.C. Code § 42-1103 (Council of the District of Columbia)
4. D.C. OTR Tax Notice 2023-03, Taxation of Refinances and Modifications
5. D.C. OTR Recorder of Deeds FAQs
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Typical Cash-Out Refinance Closing Costs for a Second Home · Can You Refinance and Take Cash Out on a Second Home? · Does a Cash-Out Refinance Require a New Home Appraisal?
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
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.