How do I deal with living with my fiancé's grandmother?

Its one of the many reasons I fell in love with my fiance; his commitment to family. He has been taking care of his grandparents since he graduated high school, 13 years ago. His Grandfather died last April, so now its just his Grandmother. I am very close with my family, so the fact that his grandparents meant so much to him, meant a lot to me. However, I never realized how much it would affect our relationship.

Fast forward to me moving in. I found a job closer to him and needed to move quickly. Moving in with him seemed like a logical idea. We live in a split foyer house with his grandmother; she has the basement apartment and we have the upstairs half of the house. I had never lived with a significant other before. So, not only has it been difficult learning to live with someone else... I also have to learn to live with his grandmother. They have co-habitated for 13 years. He didn't care if she just walked up stairs unannounced... I do. She is a very difficult person. She puts me down in front of other people because she thinks its funny. At first, I just put up with it. "Respect your Elders" I thought. But after a year of it... I can't take it anymore. I finally told her that it hurt my feelings and I didn't like it. She told me I just took her sense of humor wrong and shouldn't take it like that. I don't know how to get her to stop. I've started mentioning it right after she says things and point out that it hurts but then my fiance gets frustrated with me. He's tried saying things to her too... but clearly, nothing is working.

We live in a bad area. Bad as in, highest crime rate in the state, one of the worst school districts in the nation, and one of the highest taxes in the state. I have no friends within a 45 mile radius. I told my fiance that I wanted to move. He owns 50% of the house and she owns the other half. The house is paid off, so we just pay for the utilities. She can't afford to live here alone because the taxes and utilities are too high. Well she could...but she'd have to budget way more than she wants to. We told her that she can come with us but we'd need to sell the house to have money towards the new one (neither my fiance or I make very much money). We also said we could help get the upstairs in a condition where she could rent it to the local military base. That way its a little more reputable than some Joe Schmoe off the unsafe streets in our area. We also gave her the option of moving to a 55 and up community. Her responses were that she wouldn't want strangers living in her house and she doesn't want to move. She also said to take her out back and shoot her before we put her in a "home." She's a very active 80 year old. You would never know she was 80. But she doesn't like any of the options we presented her with. I get it... change is hard at any age but especially as you get older. But at least we are trying to help her!!!!

Now I'm terrified she's going to come with us. We gave her that option a while ago. But since then, I've begun to resent her. She hasn't saved any money for elder care. I have no idea how we are going to be able to afford to pay for her, if something were to happen. She also isn't careful. We come home from work and she's climbing a ladder to get to the roof to "fix a leak." She said, if she falls... it's her problem. I tried explaining that it would be hard for us to figure out who would take off work to stay home to take care of her if she fell and broke a hip. But she just makes some snarky comment back to me, thinking its funny. I also resent that we are held back from doing things we want to do. We would LOVE to move across the country. But we know that's not really an option if she comes with us.

My fiance get along great. Except when it comes to her. She makes such awful comments sometimes like "I wouldn't know your engagement ring wasn't costume jewelry because its not a diamond" or when we bring up moving she says to my fiance "You said you would never leave me, so there!" 90% of the fights between my fiance and I are about her. My friends are so tired of hearing me complain about it... I think I'm losing friends because I'm not that fun anymore.

I resent that, at 24 years old, I'm having to worry about this. But its not fair to my fiance. And I try so hard to not talk to him about it anymore because I don't want to fight about it. I did tell him though that I would need to see a therapist if we continued living with her after moving. I need to figure out how to live with her. Did I also mention she's a hoarder? Like floor to ceiling boxes and boxes of junk. And she goes to yard sales EVERY weekend (except in the winter) to accumulate more stuff.

I'm desperate and didn't know where else to turn. I'm sorry for writing a book... but I need help. I feel like such a horrible person when I talk to him about it and he cries. How do I save my future marriage with my best friend???