Briefly, here is Luther’s definition of Faith in its real sense. He says:
“This understanding… is faith itself, a knowledge; of things invisible and trustworthy. It is a hidden understanding, for it is one of those things that a man, know; by his own powers.” Quoted in, James M. Kittelson, Luther The Reformer, pg. 94.
viii. Briefly, here is Luther’s definition of being “justified.” He says.
“…faith of itself is God’s gift and God’s work in our hearts, which therefore justifieth us, because it apprehendeth Christ our redeemer.” Martin Luther, A Commentary on St. Paul’s Epistle to the Galatians, pg. 98.
“…but as concerning justification, Christ and I must be entirely conjoined and united together, so that he may live in me and I in him.” Ibid, pg. 169.
ix. Thus the term “justified by Faith” means cleansed, washed, purified from sin by the revealed truths of the Word.” Is this so in the Bible? Yes! Here is Eph. 5:25-27.
x. To be justified is indeed to be changed from sin to righteousness. 1 Cor. 6:9-11; Tit. 3:5-7.
xi. The word of God or “revealed truths” of the Gospel does not itself make us righteous by an independent power from God, for it is God that justifies the penitent. Rom. 8:33.
xii. God justifies the penitent using Faith as the instrument to cleanse us. Gal. 3:8.
xiii. Thus the meaning of “justified by Faith” is the following summary.
1. It means to be delivered from the internal presence of sin by Faith.
2. It means to be made righteous or pure.
3. It means to be changed from sinning to obedience.
4. It is an internal moral change.
Taken from REVELATION STUDIES BY NYRON MEDINA

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