60 Second Savings: A Cure for High Closing Costs

New-home buyer? Here's one way to ease those hefty closing costs.
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From application fees to bank and attorney expenses, closing costs can quickly add up to 3% to 6% of your new home's purchase price.

And while the regulations on them tend to be extremely rigid, some savvy home buyers are negotiating with the home's seller or developer and having


cover your closing costs.

Not so fast -- this doesn't mean you're totally off the hook.

The developer or seller can tag the closing expenses onto the sale price of the home, thus increasing your mortgage.

The closing costs, in effect, get spread throughout the mortgage term. This works great for those who would prefer to pay an extra few hundred dollars a month vs. tens of thousands of dollars or more upfront.

"That's one of the games you can play on a mortgage ... and you've saved money on the back-end closing cost," says Daren Hornig, a managing partner at real estate firm Saxa.

And yes, Hornig says, it's totally legal.

To view Farnoosh Torabi's video take of today's segment, click here.

Farnoosh Torabi joined TheStreet.com TV in July 2006 as the site's first official video correspondent. Previously, Farnoosh was a business producer and on-air reporter for NY1 News, Time Warner's 24-hour news channel in New York City. Farnoosh is a regular columnist for AM New York and has written for Money, Time, New York Daily News and Newsday. Farnoosh is a graduate of Pennsylvania State University, with a degree in Finance and International Business and holds a M.A. from the Columbia School of Journalism.