Why Do You Need Title Insurance?

Title insurance provides a guarantee that the title your lender holds on a property is free from liens or another title cloud.

Title Insurance is required by lenders when you borrow money to purchase a property. After they have thoroughly researched the title, courthouse records, and other public databases, the Title Insurance company issues this insurance policy. 

The policy will remain valid until the time you sell. Any future buyers will need to buy title insurance to cover any liens that may have been incurred while you owned the policy. Many agencies such as www.clearskiestitle.com/ provide title insurance according to your needs.

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This is how you should understand your coverage: it covers the period prior to your closing date for purchasing your property. The coverage ends at that time, but it extends indefinitely back as long as records are available. 

You cannot claim against your title insurance if you create a new lien, such as a tax lien, by failing to pay taxes. This lien must be paid from any proceeds of any future sale. However, mistakes can happen and the next owner will need to have title insurance.

Two policies are available: one for the lender and the other for you. It covers the amount of the loan that they make to your account. An owner's title policy is an optional option that covers your equity in addition to all loans. It is possible for your title to become cloudy. 

What happens if someone tries to steal your identity and gets a second mortgage? What happens if a neighbor builds on your property, either intentionally or not? If you don't file suit within the time limit, he can eventually acquire title to the land. You should ensure that your owner's policy covers you against such risks.

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