How Oil, Gas and Mineral Rights Affect Mortgages
Oil, gas and mineral rights can mean big money for homeowners.
But does signing an extraction lease mean no new mortgages for the owner or subsequent buyers?
The answer: it depends.
The term “mineral rights” refers to the ownership and use of whatever’s below the surface of a property. That might include not only minerals per se, but also water, oil, gas or coal. A mineral lease is a contract that allows someone other than the property owner to extract and exploit the minerals. One common type of contract is an oil and gas lease.
Jerry Simmons, executive director of the National Association of Royalty Owners, a nonprofit group in Tulsa, Okla., says he’s never heard of a mortgage being held up due to mineral rights.
“I have members in all 50 states,” he says. “I haven’t asked all of them, obviously. But I put the feelers out to our board of directors and state chapters, and nobody has heard of any problems like that.” If borrowers had problems getting mortgages on land with mineral leases, Simmons is sure he would have heard about it.
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