You've married up and you're ashamed of having a poor mother, and still cringeing after she tapped PIL for cash.
OP, most of your opening post is about the cash your PIL have given you. We didn't need to know about the extension you're planning, or that you don't work much yourself. Your OP reads as PIL V DM 2019, by the way. DM is found guilty of being poor and greedy.
Don't beat yourself up - embarrassing relations, like the poor, will always be with us. PILs are evidently kind, generous people and they're not snobs. No one holds DM against you.
But watch it.That acceptance is because most people in your circle, inc PIL, can see farther than financial worth in a person.That's why - whisper it - they let you into it and are paying a lot of your and your children's lives. If PIL were as judgemental about you as you are about DM, it wouldn't be pretty.
I can imagine your childhood was properly hard and insecure, and you're desperate to build solidity and security. A) Well done, quite right too B) Sympathies, it's shit having feckless parents C) of course you're materialistic, you were taught by the best - DM.
But. Don't be the person who yanks up the drawbridge on their family because they've lucked out and now looks down on their own flesh and blood. It's really, really obvious when people do that and given how kind people have been to you...
The house you're sitting in is tangible evidence of decent values at work. You might just think of them when dealing with DM, no matter how grim she is. Be the bigger person.