Buying a Parent's House

[Christopher Gilstrap]

My mother's home is paid off. I'm wondering the best way to purchase her home and rent it back to her. Can she owner finance it and then pay us rent? That way the house would be in our name if she has health troubles and all the interest is paid to her not a bank but we should be able to deduct it still. I assume she would owe some taxes on the interest we pay back to her? Or would it just be better for us to get a mortgage and charge her rent and have her invest the money? She'll be retiring this year and we'll be in a higher tax bracket than her. The house could use some repairs which we could then also deduct along with depreciation?

Am I missing anything?