re: Down payment on a home - how much is too much?

This is horrible advice. The 3.5% is really not 3.5% as the interest is front loaded and not evenly spread across the loan. The OP needs to look at the amortization schedule on the loan.

Most people are in their homes for only 5-10 years, particularly their first home. In this scenario, most of the mortgage payment will go to interest rather than principal. Interest is wasted money (after you take the tax deduction).

A 15 year loan would significantly reduce the amount of money that is wasted on interest.