Based on information provided by the buyer, I entered the terms at which she can borrow under all three options.
The $270,000 and the $285,000 first mortgages are both no-cost at 6% for 30 years -- they differ only in the mortgage insurance premium.
Consolidates in the first mortgage, which means that she takes the first mortgage for $285,000 and pays off the non-mortgage debt; and c.
Consolidates in a second mortgage, which means that she takes out the first mortgage for $270,000 to buy the house, and afterwards she takes a second mortgage for $15,000 to pay off the non-mortgage debt.
I used this calculator to determine total costs over 6 years if the buyer: a.