According to the segment, which of the following is recommended to have before buying a home?

• A. Multiple credit cards with high balances
• B. A stable source of income
• C. A vacation planned abroad
• D. A new car loan

Answer: (B)

Verified step by step guidance

1. Understand the context of the question: The problem is asking about financial preparedness before buying a home, which is a significant financial commitment.
2. Evaluate each option provided: Consider how each option impacts financial stability and the ability to manage mortgage payments effectively.
3. Option 1: 'Multiple credit cards with high balances' - High credit card balances can negatively affect your credit score and increase your debt-to-income ratio, making it harder to qualify for a mortgage.
4. Option 2: 'A stable source of income' - A stable income is essential for ensuring you can consistently make mortgage payments and manage other financial obligations.
5. Option 3: 'A vacation planned abroad' and 'A new car loan' - Both of these options involve significant expenses that could reduce your ability to save for a down payment or manage homeownership costs effectively.