This post continues my series of short answers to common questions about Catholicism. For the previous parts in the series, see the "Catholic Q-A Series" blog label.
What do you think justification by faith, not works, means? What does it mean to you personally?
As a Catholic, I would not make the dichotomy between faith and works that you have made here. Faith is never “not works.” In fact, the kind of faith that saves is that which is “working through love” (Gal 5:6). So, I don’t place a wedge between the two. Instead, I have always considered them to be two sides of the same coin.
As to the role of faith, it is necessary for salvation, as the Catechism explicitly states (cf. no. 183).
Are we really justifed by faith, or are we actually justified by love?
I think this is another false dichotomy. Faith and love are not at odds with one another. If I have faith so as to move mountains, but I have not love, I am nothing (cf. 1 Cor 13:2). Faith and love together make the breastplate from the armor of God (cf. 1 Thes 5:8). Love issues from a sincere faith (cf. 1 Tim 1:5). Grace causes an overflowing of faith and love (cf. 1 Tim 1:14). As such, I say we are justified not by one or the other, but by both. We are really justified by faith and love.
How do or should Catholics think about their eternal destiny? Who can have confidence and under what conditions? Again, a personal answer would be helpful.
Catholics believe that, by God's grace, we can enter into friendship with the Lord and receive the forgiveness of our sin. We have absolute certitude that, if we were to die in this state of righteousness, then heaven would be ours. But, we also believe that, because of free will and the concupiscence that comes with our fallen nature, this same person can choose to sin against God so grievously that he destroys the divine life within himself. In other words, he can fall from the state of grace. Because of this radical possibility, there can really be no absolute certitude of final perseverence, or of remaining in that state of righteousness and friendship with God for one's entire life.
Note that this doesn't mean that Catholics live in fear. Such mortal sins are generally rare, and they are usually the end result of a long and steady decline deeper and deeper into sin, as man continues to indulge certain unhealthy desires. People don't just wake up one day and commit mortal sins. The typical Catholic slips and stumbles with everyday vices as he strives to grow closer to the Lord, to be obedient to Him and to discern His will. When the Catholic falls, he simply returns with a contrite heart to the Lord, who forgives him and restores him to his former state of righteousness. When, by God's grace, he succeeds in doing God's will, the divine life within him increases and his attachment to sin decreases, to the point where certain sins no longer have the same luring appeal that they once had.
Salvation is a process, and as long as the Catholic continues this process of striving for the Lord and always seeks His grace, then he can have a "moral certitude" that he will persevere to the end. In other words, he has good reason to believe that he will stand before the Lord one day with his grace and faith intact. This certitude increases as he gains mastery over himself and his fleshly desires and he gains freedom from his attachment to the various sins that used to tempt him and cause him to fall. His hope is that, by God's grace, he will not only be cleansed of all sin, but even all attachment to sin, and he will grow closer and closer to God to the point of achieving eternal bliss with Him in heaven.
Note, the prevailing Catholic virtue is not fear, or guilt. It is hope: hope in the Cross, hope in the resurrection, hope in God's grace to bring us into eternal beatitude with His Son.
What does it mean to prepare oneself for grace?
I guess you could say that preparing oneself for grace takes place through prayer, when you ask God to soften your heart and make it open and docile to grace so that when you receive grace (primarily through the sacraments) it will have true, transformative power in your life. God does not make anyone a saint against his or her will. We must be open to the grace of God, and to me, preparing oneself for grace means praying for this openness.
Of course, the preparation that God makes within us to receive His grace is itself a grace. Grace always has the first initiative.
What does it mean for God to love us if he constantly threatens to take his love away, and even for an individual act? Or conversely, if God's love is reduced to a desire for our salvation whether we're presently in or out of grace, what kind of love is it that suddenly ceases at death and becomes hatred?
We should not understand the effect of sin as God taking His love away, as if He were a petulant child who decided to take his ball and go home because you displeased him in some way. God IS love. Everything He does and every experience of Him is a consequence of this love. He always, always loves us. The problem is, we don’t always love him. We fall from the state of grace (or, to put it another way, we destroy the divine life within us) whenever we fail to love God, not when He fails to love us.
It can only be this way. One cannot commit grave sin and expect to remain in a state of righteousness. It is unjust (and as such, unloving) for sin to go unpunished, or for God to declare righteous a soul that is marred by sin. Note however that even someone at odds with God, or in an unrighteous standing before God, is still loved by God. The very life and being of said person has sprung forth from and is sustained by the love of God. Every grace and blessing and good thing this person has ever received was the fruit of this love. This love will also cause God to shower His grace upon the sinner, to compel him to repent of his sin and return to the Lord. And when the sinner repents and seeks God’s forgiveness, it is the love of God that will justify and sanctify him.