You're looking at a way to lower the payment, then looking at the work the house needs. It's reasonable to want money left for that work. It's also reasonable to want a smaller payment. Let's put the actual choices side by side.
Discount points use cash upfront for lower pricing on the loan. Rate-linked lender credits generally go the other way, offsetting eligible costs in exchange for a higher rate. We compare alternatives for the same transaction so we can see what you're getting for the difference.
Then we look at the house. Spending cash on points may leave you with a lower payment and a repair bill you can't comfortably cover. A home that needs less work right away may leave a different amount available.
We also ask how long you expect to keep the loan. We compare the extra cost with the payment difference, then look at the debt that would remain at a likely sale or payoff date. A hoped-for refinance stays uncertain in that comparison.
If the offer includes a seller credit, we check how it fits with lender credits and eligible charges. Seller Credits, Rate Buydowns, and Net Proceeds covers the negotiation. Before we ask for help, we want to know how you could actually use it.
You don't have to treat keeping cash as a mistake. We can give that preference room in the numbers.