A seller wants $120,000 for a home, and still owes $20,000 of the original loan at 7% interest. The current interest rate is 12%. A buyer can pay $60,000 down and wants to carry a mortgage that includes the seller's $20,000 existing mortgage and the remaining $40,000 for a total of $60,000 at an interest rate of 10%. What kind of mortgage loan is this?

A blanket mortgage covers multiple properties under one loan, allowing the borrower to finance several properties together. In this scenario, there is only one property involved, which makes this option irrelevant as it does not pertain to the structure of the financing described.

An equity mortgage refers to a loan that is secured by the equity in a property, usually for a specific purpose like home improvement. In this case, the financing involves assuming an existing mortgage and adding to it, rather than leveraging equity. Hence, this term does not apply to the situation presented.

A buydown mortgage involves paying upfront points to lower the interest rate on a mortgage for a specified period or for the life of the loan. This option is irrelevant here, as the transaction described does not involve any upfront payment to lower the interest rate; it simply combines the existing and new loans into a wraparound structure.