Which incomes banks accept when applying for a home loan – a complete guide

When someone applies for a home loan, the bank looks at one thing first – income.
It determines whether you will be approved, how large a loan you will be granted and on what terms.

Unlike what you may have heard by word of mouth, banks have clear rules on which income they accept, how you prove it and how they assess it.

In this guide we cover the main types of income that are usually recognised, those that are harder to get accepted, and how to prepare your documents so that you look as reliable as possible in the lender's eyes.

1Why income is at the centre of the home loan decision

2The main principles banks use to assess income

Different banks have their own internal rules, but the logic is similar everywhere.

Amount of regular income

The higher your provable income, the larger the home loan you can get.
The bank calculates what part of your income can go towards repayments after deducting other loans and obligations.

Usually a "debt-to-income ratio" is used – what share of your monthly income goes to loan repayments.
With a lower percentage, the chances of approval and good terms are greater.

Stability and income history

Banks do not like sharp jumps and drops.
It is more important for your income to be stable over the last 6–12 months than to be very high only in the last two.

If you have recently changed jobs, some banks wait for the probation period to end before accepting the new income in full.

Provability and source

Income paid "in hand" or in cash without documents is almost never accepted.
The lender wants to see the income arriving by bank transfer or on a payroll, with declarations, contracts and social security contributions.

It is important that you can explain the source of the income and support it with official documents.

3Employment contract income – the most easily accepted income

The simplest and most widely accepted income is that from a permanent employment contract.
Banks like it because it is regular, traceable and tied to an employer.

Permanent employment contract

If you are on an open-ended employment contract and have worked for the same employer for some time, that is a strong plus.
Banks usually look back 6 or 12 months to calculate your average net income.

The documents most often required are:

• an income certificate from your employer
• a copy of the employment contract or an addendum
• bank statements, if your salary is paid into an account

The longer your service with your current employer, the more stable you look to the lender.

Fixed-term contract and probation period

With fixed-term contracts, or if you are still on probation, banks are more cautious.
They often either do not accept the full amount of the income, or require a longer history.

In such situations you may need to:

• include the income of a spouse or partner
• wait for the probation period to end
• consider additional income, if you have any

4Self-employed people and freelance professions

More and more people work as freelancers, consultants, lawyers, private-practice doctors, or sole traders / self-insured persons.
Their income can also be accepted, but the conditions are more specific.

Income from a freelance profession

For freelance professions, banks usually look at:

• the annual tax return
• the insurable income
• the history over the last 12–24 months

Instead of a single monthly salary, the total income for the year is considered and an average monthly amount is calculated.
Some banks work with a more conservative portion of this income – for example 70–80%, to account for variations.

Income as a self-insured person or sole trader

If you are a sole trader or self-insured, what matters to the bank is:

• that the business has no large arrears or losses
• that it has a stable turnover
• that you are in good standing with taxes and social security contributions

They will ask for declarations, certificates from the National Revenue Agency (NRA) and accounting documents.
The more transparent your business is, the easier it will be for the income to be accepted.

5Business owners and partners in companies

A company owner often has income that is not a standard salary.
Banks consider several options.

Managing director's remuneration

If, as a managing director, you receive official remuneration under a contract, the bank may accept it in a similar way to a salary.
The criteria of stability and history apply again.

Dividends and income from shareholdings

6Additional income that is often accepted

Besides your main salary or business income, banks may also include other regular income.

Examples of income that is often recognised:

• rental income from properties, declared and received through a bank
• pensions, including disability pensions (sometimes partially)
• employment income from a second contract or additional work

Banks take a more conservative view of:

• bonuses and commissions, if they are not regular
• premiums that are not guaranteed by contract

In most cases this income is taken into account, but not at 100%.
The bank prefers secure and predictable income.

7Income from abroad and working in another country

Many people live and work abroad but want a home in Bulgaria.
Income from abroad can also be accepted, but it depends on the bank and the country in which you work.

When it is accepted more easily

It is easier when:

• you receive income via bank transfer
• you have an employment contract with a registered employer
• you can present payslips and tax documents

Some banks have special programmes for Bulgarians abroad.
It is a good idea to check in advance what the requirements are for the specific country.

Required documents

They will usually ask for:

• a copy of an employment contract or other work contract
• payslips for the last few months
• bank statements
• if necessary – a translation into Bulgarian by a sworn translator

The more complete the documentation, the easier it is to reach a decision.

8What banks almost never accept as income

Not every source of money you have counts as “credit” income.
Banks are cautious about:

• cash with no provable origin
• “under the table” income that does not go through payroll or a bank
• one-off receipts – selling a car, a loan from relatives, occasional fees
• income from activity with no registration and no taxes paid

Such income may help with a deposit, but not with demonstrating monthly affordability.

9How to increase your “creditworthy” income

There are several practical steps you can take to improve your profile before applying.

Combining household incomes

Banks often accept the household's total income.
If you apply together with a spouse or partner, your combined income may allow a larger loan.

It is important that you both have a clean credit history and documents in order.

Reducing other loans and obligations

Before applying for a large home loan, consider:

• repaying or reducing consumer loans
• closing unused credit cards with large limits

The fewer current obligations you have, the better you look in the bank's eyes.

10What income documents banks usually require

11The role of a good agent and real estate agency

Applying for a home loan often goes in parallel with the search for a suitable property.
That is why it is useful to have both a loan consultant and an experienced agent at your side.

A professional NOV VEK real estate agency can guide you towards:

• properties that genuinely match your budget and income
• agents and partners with experience in home loans
• the stages at which it is wiser to first get pre-approval and only then choose a property

When you work with a team that knows both the market and the bank's requirements, you reduce the risk of last-minute surprises.

The income you show to the bank is the foundation of your home loan.
The more stable, provable and well prepared it is, the easier it will be to get approval and good terms.

The accepted types of income can vary – from a salary under an employment contract, through freelance and business income, to rental income and income from abroad.
The key is for everything to be official, documented and consistent over time.

If you plan to buy a property with a home loan, start by putting your income and documents in order.
Then, with the help of a professional agency and a good agent, you can find a property that matches both your dreams and your means.