I am in a Mortgage Conundrum - please help

[Dan N.]

My wife and I just added our children to the deed of our house, which we currently have a mortgage on. We also happen to be in the middle of applying for a HELOC with the same mortgage lender. We started the application process before adding our children to the title and the lender is about to send our application to the underwriters. My wife and I don't want to jeopardize our current mortgage (our children have no income), and we are worried that going through with this HELOC might cause our lender to see that our children are now on the deed, thereby invalidating our current mortgage and causing problems with the HELOC as well. Would it be best to just cancel the HELOC application at this point? We also aren't sure whether it's best to openly discuss this with our lender because we don't want them to invoke the due-on-sale clause, as we have technically transferred ownership of a portion of our property to our children. Any advice would be appreciated!