Grace, I think to have the two pieces of fabric sewn together and then cutting the top one away would be hard. How about using freezer paper and tracing the right side of the pattern on the paper side of the freezer paper and iron it onto the applique fabric. Cut the applique out, remove the freezer paper or just fold it back off the edges of the applique and then use a little water soluble glue on the back of the applique or pins in the center to hold just the applique to the square and then do your applique stitch on the applique. This might work a little better. I'd b e afraid of not getting the applique cut out well that way you are doing it.