There are gays and transsexuals. Your children will be fine, if you know that.
But to answer your question, ideally, you should disclose it, and it's okay that they are who they are, rather than indoctrinating them into homophobic views, as you probably planned. It is not a "choice" to become gay. So if your child becomes gay after growing up with a homophobic attitude, it will be miserable with self-hatred and doubt. Even in the probable case that your child turns out to be heterosexual, why would you want them to be fanatics themselves?
If you really want to love your children, you basically stop being homophobic.