New York state taxes on out-of-state seller financed home; balloon payment taxation

I'm trying to determine the benefits of selling my home using a seller financed transaction, but I am confused by the cross-state implications.

I'm selling my primary residence (lived in over 20 years) and expect/estimate a gain of over 570k after subtracting remaining mortgage, sec 121 exclusion for MFJ, and cost basis. We are in WA and thus have no state income tax.

We are moving to NY state this year after the sale, where we will be for at least the next 4 years. NY does have state income tax, including (I believe...?) capital gains taxed at their ordinary rates.

I can either sell and take the lump sum this year, and pay fed tax (maybe 160k) on the full 570k+ profit,

OR

I have a slightly lower offer (maybe 200k less for 370k gain) for a seller financed transaction which will pay me half this year, and spread the rest over the next 4 years (3775/month at 5.5% interest, with a "gross profit percentage" of 37%), with a balloon payment of 625k after 4 years. 

If I did take the seller financed option, I wouldn't owe any tax this year (likely saving 160k). But I would owe federal and NY state tax on the gross profit percentage of the monthly payments. Where I am confused is the balloon payment amount - is that taxed, both federal and by NY state, at ordinary rates? And, is that taxed on the full amount, or only the gross profit percentage of the balloon?