What type of loans are primarily involved in the primary mortgage market?

The primary mortgage market consists of lenders directly originating loans to borrowers for the purchase or refinance of real estate. In this context, the focus is on newly created loans established between borrowers and lenders. This interaction is fundamental to the primary mortgage market as it facilitates the initial funding of home purchases or equity withdrawals in refinancing situations.

In this market, lenders assess borrowers' qualifications and terms are negotiated directly. These transactions set the groundwork for how loans are subsequently pooled and possibly sold in the secondary mortgage market, but the key aspect here is the origination process itself. Thus, the role of newly created loans in establishing direct connections between lenders and borrowers is what defines the primary mortgage market.