I assume the value of your house will keep going up.
Gerda- not ever a good assumption. Prices go up and go down - sometimes by a lot. It's fine if you have the wherewithal to stay put and ride it out. Not so good if your situation changes and you're stuck underwater in a house you can't sell (see 2008!). Housing in the long term is actually not that great an investment, despite the experience of baby boomers like myself who got in when prices were still relatively low and saw a boom in housing prices. My current house was worth $600k before the crash in 2008, I bought it for $420k in 2010, now it's worth $600k again.
Housing prices right now in most places in the US are quite high. If she keeps the house and has to sell in the future because the carrying costs are too high, if the value of the house has fallen, she could end up upside down. If she decides she has to move back to the mainland because the cost of living there is too high - she might not be able to if the house is upside down. It's one thing if the house had lots of equity and could be rented out at profit but it sounds like that's not the case.
The one argument for owning right now if one can afford it is that interest rates are so low. And IF there's the potential for putting sweat equity into her property, it might be worth holding onto it. However, being a single mom without experience in housing maintenance/repairs, it would require a lot of effort to learn to do those things that can build sweat equity.
