The primary mortgage market is the market whereby lenders deal with end-consumers to underwrite new mortgages.
This market is what most people are familiar to as opposed to the secondary market whereby mortgages are sold to institutional investors.
In the primary market, home buyers and real estate investors borrow loans from lenders.
When a lender is satisfied with a borrower’s profile and loan request, and the borrower accepts the terms of contract, a secured loan is finalized where the property is pledged as collateral for the financing to close the property transaction.
It must be noted that most mortgages that originate from the primary market will eventually be sold on the secondary market.
Lenders who hold onto their own loans are the minority.