I will sum up your intelligence level in 1 sentence.
Peter says that according to God's great mercy, we are born again 1 Pet. 1:3
3 Blessed be the God and Father of our Lord Jesus Christ! According to his great mercy, he has caused us to be born again to a living hope through the resurrection of Jesus Christ from the dead
No Mercy = No Grace!
But what you still don't understand is that Mercy does not require God to also give his us Grace! When a judge, for example, is merciful to a convicted criminal and commutes his sentence to something much lighter, should the criminal also expect the judge to have a whole hosts of perks waiting for him in the outside world after he's released from prison? Should the criminal, upon his release, expect for the judge to offer him a suite of rooms in his mansion, access to all the servants in the house, a choice of cars from the garage, total access to all the amenities on the grounds, the power boat moored to the dock on the lake, etc.? Grace goes well beyond Mercy because the former actually bestows gifts (Rom 12:6). Grace gives us gifts that we don't deserve! Moreover, Grace can do something that Mercy cannot: Grace can actually empower us to live godly lives! Our call unto salvation does not come by Mercy, but by Grace! We are not saved by Mercy, but by Grace, etc.
What Peter says makes perfectly good sense, since Mercy is the grounds for Grace. Logically, forgiveness precedes our adoption into the royal family, just as adoption precedes our inheritance, etc. I would recommend that you spend a few weeks meditating on the Parable of the Prodigal. The foolish son
rightfully did not expect the grand reception he received after he returned him. He sought his father's forgiveness and hoped that the father would take him back as a servant in his household. But he received far more than he expected, didn't he? He received GRACE! He received so much that angered his older brother.
Don't forget: It wasn't Mercy that was given to the elect in eternity; rather it was Grace!
2 Tim 1:9
9 who has saved us and called us to a holy life — not because of anything we have done but because of his own purpose and grace. This grace was given us in Christ Jesus before the beginning of time,
NIV
It's one great thing to be forgiven by the Mercy of the Righteous Judge; and yet quite another to receive an abundance of precious gifts from him, as well, by his Grace. It's one thing to be forgiven, and something else entirely to receive the gifts of Grace that actually transform us from the inside out, changing our lives completely making us fit to inhabit the eternal kingdom.