First home buyer needs help deciding on payment plan?

You should be able to secure your own financing. Find your own loan and compare what you find to what the seller is offering. Personally, with rates as low as they are, I would not do the balloon-thing. In three to five years, interest rates may be higher and you may be forced to borrow to make the one big payment. I suggest that you get an amortization table and play with the figures. Let me know if you want me to send you a 15-year table. It's Excel. As always, scan the file before opening it.