What is the primary mortgage market?

The primary mortgage market refers to the initial phase of the mortgage lending process, where borrowers directly obtain loans from lenders. In this market, financial institutions like banks, credit unions, and mortgage companies provide funds directly to homebuyers or property owners who are seeking to purchase real estate. The emphasis here is on the interaction and negotiation between borrowers and lenders or originators regarding the terms of the loan, such as interest rates and payment schedules.

This market serves as the starting point for the mortgage process, enabling borrowers to secure financing for their properties and helping lenders to build their portfolio of loans. The correct answer emphasizes the role of negotiation and agreement on mortgage terms between these key parties, distinguishing it from activities associated with the secondary mortgage market, where existing mortgages are bought and sold.

The other options highlight aspects that do not align with the primary mortgage market's definition. For example, the selling of mortgages to investors pertains to the secondary market, and a marketplace for second mortgages or online applications might represent specific niches within the broader lending landscape but do not encapsulate the fundamental function of the primary mortgage market itself.