Sale of home after a relative's death

[Ryan Mitchell]

My mother in-law needs a mortgage to purchase a home that belonged to a family member that passed away. Our options would be for my wife and I to get a 2nd mortgage (our primary residence is in Indiana) or to co-sign on a mortgage with my mother-in-law. If we did the 2nd option, would she be able to claim homestead exemptions if we are on the mortgage?

Eventually (within 2-5 years?) we will be moving into that house and making it our primary residence. Which option would be best for us? Is there another option I'm not thinking of?