If the seller of the house goes to a nursing home, will we lose the house if not paid in full?

You can request specific performance if the parties refuse to perform. You should have an attorney review the contract to apprise you of all your rights.

You do not give enough information for me to be able to answer your question. All contract for the sale of land must be in writing. Do you have a written contract?

Probably not, especially if the contract was recorded with the county. Just because he is in a nursing home does not remove his contractual obligation to turn the property over to you once the house is paid for.

Depends on whether the seller is still competent. If so, a nursing home should not matter. If not, then a representative will have to be appointed by the Court to finish the deal.

You have a binding contract (hopefully...without seeing it, there is no way to ensure the contract is completely binding), you need to record the contract with the County Register of Deeds...this will cost you a a little money..likely less than $60.00. This is necessary to put your contract for a Deed(which is normally not a good transaction for various reasons), on the public record as to make it very difficult for anyone to sell the property to others. Do this ASAP. You may want to have an attorney review you agreement to ensure you have a good deal as these transactions go sour all the time.