Father v. Grandparents (NY) Help

My fiance's daughters mother signed papers giving her parents guadianship of their daughter because she is unable to care for the child. (She has been in and out of nuthouses these last few months) We want his daughter to stay here with us. We have a loving, and stable family enviroment, our apartment is a bit small though seeing I have one child who is the same age, and we also just had a baby. We have a two bedroom apartment. The grandparents seem to think we dont have the room, but we see no reason why she can't share a bedroom with my daughter, the room is big enough for both of them, I mean living here is not a permenat thing. Is there any lwas giving my fiance the right to have her seeing her mother is incapable now? Is there any lawyers we can talk to that don't want more money than we can come up with at one point? Is there someone who has been were we are that can help? It's been hard on all of us. We had a law guadian appointed who also said the apartment was too small, the problem with that is.....she has never been here, see a problem with that?

I am currently in same situation with my husband and his daughter and the mother's mother. I have a lawyer and my advice is to get a lawyer and petition the gp for custody. Mothers and Fathers have more rights than grans, unless proven to be unfit. If neccessary move to a bigger location, if possible. As long as you have a stable environment then dad will get custody.