difference between loans/bonds/mortgages?

<p>I can't seem to really distinguish them, other than the fact that mortgages are loans related to real estate, and bonds are loans that are broken up. I'm probably wrong about the bonds; but anyways, most definitions define them all practically the same, loaning money and paying back with some sort of interest.</p>

<p>Any help would be great</p>

<p>Think of it this way.</p>

<p>If you take out a loan, you have an obligation to re-pay that loan with interest. The person who loaned you the money is holding a bond, which is the right to the cash flows of that loan-principle and interest.</p>

<p>Mortgages are a specific type of bond that you use to purchase a house, that have specific legal provisions. If you take out a mortgage loan, you owe money for say, 30 years at either a fixed interest rate or an adjustable interest rate. The person who owns the right to your payments is either a bank holding your mortgage bond, or an investor holding a mortgage backed security (the right to a portion of the cash flows from your loan payments).</p>

<p>Thanks, now I can easily distinguish a loan and a mortgage. Now loans and bonds are what is confusing me.</p>

<p>Theyre the same thing. You call it a loan if you're borrowing money that you have to pay back. You call it a bond if you're the lender who's collecting principal and interest.</p>