I am considering a Contract for Deed purchase of a home with a balloon due in 3-5 years. I know I can make the home payments, but my concern is financing the balloon.

If housing prices increase while I am paying my Contract, can I use this "difference" to help me pay off the contract?

In other words, if I have a purcahse contract for 120k and at balloon-due date the home is worth 135k, can I leverage part of the home value to finance my loan? (Down payment, closing, etc.). Or will I need savings-in-hand (cash) to effect a mortgage at that time?

Thanks for your help!