You're right it would be a mistake to sell your house and put money into a property that was purely owned by him. Tenants in common is the way, defining amount of deposit added by each party and how any future division would work if you split.
It is too soon for you both to sell and do this, because of the costs and ties involved in both selling and ending up with all your eggs in one basket together, especially with all the children involved and the impact on them.
It is costly to rent, but it would be better to let your properties and rent together for perhaps a year to ascertain with ether living together actually works. It's a big deal when there are so many kids. If it doesn't work, you both have properties to go back to. If you've sold them both and it doesn't work (and you could find this pretty quickly if you haven't lived together) then the timescale for you to sell the jointly owned property and both buy could be a very very long time and you'd be stuck in a horrible situation and bearing costs of renting then anyway.
Best to be cautious and keep your own properties for a while longer. You don't know if you and him in same house will work, never mind all the kids getting on - there's a lot at stake here, so selling up and buying together right now would be very risky and probably reckless.
An alternative would be to all squash into the bigger of your houses. Not perfect, but for 6 months or so, it will show if living altogether can work.
If his kids are younger and need to stay near their school, it might well be that you are needing to go to his area. However, do t let the fact he has younger kids mean you make all the compromises, especially any which endanger your financial security.
In this kind of scenario , protecting your financial assets and also having a quickly accessible 'get out' in the early stages is really important - you owe it to yourself and your kids (and also to his ) to ensure that is available if necessary. Hopefully it won't be. And of course, he should be thinking about this....not just from his point of view and protection, but for yours too if he cares about you. You both need to think about your own protection and that of all of you. It's complex and not romantic but needed.
Hope you can manage to have the difficult and oractical conversations and still get the excitement of moving forward together. Getting to the full stage of you having sold both houses and bought another bigger one together should be something that takes a good while here, not something to rush into at all. Before you do that, you need to have a strong sense this is working and is going to work for at least a good few years. Doing it without that a good basis for thinking that (which probably requires renting living together in one of your houses and then maybe renting a bigger house together first) might be some thing you come to regret and by impact, all those other people involved also regret.
Exciting stuff though!