diff --git a/htlcswitch/link_test.go b/htlcswitch/link_test.go
index 819ae747..9db53720 100644
--- a/htlcswitch/link_test.go
+++ b/htlcswitch/link_test.go
@@ -92,22 +92,24 @@ func TestChannelLinkSingleHopPayment(t *testing.T) {
 			n.firstBobChannelLink.ChanID()))
 	}
 
+	var amount btcutil.Amount = btcutil.SatoshiPerBitcoin
+	htlcAmt, totalTimelock, hops := generateHops(amount, n.firstBobChannelLink)
+
 	// Wait for:
 	// * HTLC add request to be sent to bob.
 	// * alice<->bob commitment state to be updated.
 	// * settle request to be sent back from bob to alice.
 	// * alice<->bob commitment state to be updated.
 	// * user notification to be sent.
-	var amount btcutil.Amount = btcutil.SatoshiPerBitcoin
-	invoice, err := n.makePayment([]Peer{
-		n.aliceServer,
-		n.bobServer,
-	}, amount)
+	invoice, err := n.makePayment(n.aliceServer, n.bobServer,
+		n.bobServer.PubKey(), hops, amount, htlcAmt, totalTimelock)
 	if err != nil {
 		t.Fatalf("unable to make the payment: %v", err)
 	}
 
 	// Wait for Bob to receive the revocation.
+	//
+	// TODO(roasbef); replace with select over returned err chan
 	time.Sleep(100 * time.Millisecond)
 
 	// Check that alice invoice was settled and bandwidth of HTLC
@@ -153,26 +155,30 @@ func TestChannelLinkBidirectionalOneHopPayments(t *testing.T) {
 			n.firstBobChannelLink.ChanID()))
 	}
 
+	const amt btcutil.Amount = 10
+
+	htlcAmt, totalTimelock, hopsForwards := generateHops(amt,
+		n.firstBobChannelLink)
+	_, _, hopsBackwards := generateHops(amt, n.aliceChannelLink)
+
 	// Send max available payment number in both sides, thereby testing
 	// the property of channel link to cope with overflowing.
 	errChan := make(chan error)
 	count := 2 * lnwallet.MaxHTLCNumber
 	for i := 0; i < count/2; i++ {
 		go func() {
-			_, err := n.makePayment([]Peer{
-				n.aliceServer,
-				n.bobServer,
-			}, 10)
+			_, err := n.makePayment(n.aliceServer, n.bobServer,
+				n.bobServer.PubKey(), hopsForwards, amt, htlcAmt,
+				totalTimelock)
 			errChan <- err
 		}()
 	}
 
 	for i := 0; i < count/2; i++ {
 		go func() {
-			_, err := n.makePayment([]Peer{
-				n.bobServer,
-				n.aliceServer,
-			}, 10)
+			_, err := n.makePayment(n.bobServer, n.aliceServer,
+				n.aliceServer.PubKey(), hopsBackwards, amt, htlcAmt,
+				totalTimelock)
 			errChan <- err
 		}()
 	}
@@ -240,6 +246,10 @@ func TestChannelLinkMultiHopPayment(t *testing.T) {
 			n.carolChannelLink.ChanID()))
 	}
 
+	var amount btcutil.Amount = btcutil.SatoshiPerBitcoin
+	htlcAmt, totalTimelock, hops := generateHops(amount,
+		n.firstBobChannelLink, n.carolChannelLink)
+
 	// Wait for:
 	// * HTLC add request to be sent from Alice to Bob.
 	// * Alice<->Bob commitment states to be updated.
@@ -250,12 +260,9 @@ func TestChannelLinkMultiHopPayment(t *testing.T) {
 	// * settle request to be sent back from Bob to Alice.
 	// * Alice<->Bob commitment states to be updated.
 	// * user notification to be sent.
-	var amount btcutil.Amount = btcutil.SatoshiPerBitcoin
-	invoice, err := n.makePayment([]Peer{
-		n.aliceServer,
-		n.bobServer,
-		n.carolServer,
-	}, amount)
+	invoice, err := n.makePayment(n.aliceServer, n.carolServer,
+		n.bobServer.PubKey(), hops, amount, htlcAmt,
+		totalTimelock)
 	if err != nil {
 		t.Fatalf("unable to send payment: %v", err)
 	}
@@ -269,24 +276,31 @@ func TestChannelLinkMultiHopPayment(t *testing.T) {
 		t.Fatal("alice invoice wasn't settled")
 	}
 
-	if aliceBandwidthBefore-amount != n.aliceChannelLink.Bandwidth() {
-		t.Fatal("the bandwidth of alice channel link which handles " +
-			"alice->bob channel wasn't decreased on htlc amount")
+	expectedAliceBandwidth := aliceBandwidthBefore - htlcAmt
+	if expectedAliceBandwidth != n.aliceChannelLink.Bandwidth() {
+		t.Fatalf("channel bandwidth incorrect: expected %v, got %v",
+			expectedAliceBandwidth, n.aliceChannelLink.Bandwidth())
 	}
 
-	if firstBobBandwidthBefore+amount != n.firstBobChannelLink.Bandwidth() {
-		t.Fatal("the bandwidth of bob channel link which handles " +
-			"alice->bob channel wasn't increased on htlc amount")
+	expectedBobBandwidth1 := firstBobBandwidthBefore + htlcAmt
+	if expectedBobBandwidth1 != n.firstBobChannelLink.Bandwidth() {
+		t.Fatalf("channel bandwidth incorrect: expected %v, got %v",
+			expectedBobBandwidth1, n.firstBobChannelLink.Bandwidth())
 	}
 
-	if secondBobBandwidthBefore-amount != n.secondBobChannelLink.Bandwidth() {
-		t.Fatal("the bandwidth of bob channel link which handles " +
-			"bob->carol channel wasn't decreased on htlc amount")
+	expectedBobBandwidth2 := secondBobBandwidthBefore - amount
+	if expectedBobBandwidth2 != n.secondBobChannelLink.Bandwidth() {
+		t.Fatalf("channel bandwidth incorrect: expected %v, got %v",
+			expectedBobBandwidth2, n.secondBobChannelLink.Bandwidth())
 	}
 
-	if carolBandwidthBefore+amount != n.carolChannelLink.Bandwidth() {
-		t.Fatal("the bandwidth of carol channel link which handles " +
-			"carol->bob channel wasn't decreased on htlc amount")
+	expectedCarolBandwidth := carolBandwidthBefore + amount
+	if expectedCarolBandwidth != n.carolChannelLink.Bandwidth() {
+		t.Fatalf("channel bandwidth incorrect: expected %v, got %v",
+			expectedCarolBandwidth, n.carolChannelLink.Bandwidth())
+	}
+}
+
 	}
 }
 
@@ -308,18 +322,18 @@ func TestChannelLinkMultiHopInsufficientPayment(t *testing.T) {
 	secondBobBandwidthBefore := n.secondBobChannelLink.Bandwidth()
 	aliceBandwidthBefore := n.aliceChannelLink.Bandwidth()
 
+	var amount btcutil.Amount = 4 * btcutil.SatoshiPerBitcoin
+	htlcAmt, totalTimelock, hops := generateHops(amount,
+		n.firstBobChannelLink, n.carolChannelLink)
+
 	// Wait for:
 	// * HTLC add request to be sent to from Alice to Bob.
 	// * Alice<->Bob commitment states to be updated.
 	// * Bob trying to add HTLC add request in Bob<->Carol channel.
 	// * Cancel HTLC request to be sent back from Bob to Alice.
 	// * user notification to be sent.
-	var amount btcutil.Amount = 4 * btcutil.SatoshiPerBitcoin
-	invoice, err := n.makePayment([]Peer{
-		n.aliceServer,
-		n.bobServer,
-		n.carolServer,
-	}, amount)
+	invoice, err := n.makePayment(n.aliceServer, n.bobServer,
+		n.bobServer.PubKey(), hops, amount, htlcAmt, totalTimelock)
 	if err == nil {
 		t.Fatal("error haven't been received")
 	} else if err.Error() != errors.New(lnwire.InsufficientCapacity).Error() {
@@ -354,7 +368,6 @@ func TestChannelLinkMultiHopInsufficientPayment(t *testing.T) {
 		t.Fatal("the bandwidth of carol channel link which handles " +
 			"bob->carol channel should be the same")
 	}
-
 }
 
 // TestChannelLinkMultiHopUnknownPaymentHash checks that we receive remote error
@@ -376,19 +389,16 @@ func TestChannelLinkMultiHopUnknownPaymentHash(t *testing.T) {
 
 	var amount btcutil.Amount = btcutil.SatoshiPerBitcoin
 
-	// Generate route convert it to blob, and return next destination for
-	// htlc add request.
-	peers := []Peer{
-		n.bobServer,
-		n.carolServer,
-	}
-	firstNode, blob, err := generateRoute(peers)
+	htlcAmt, totalTimelock, hops := generateHops(amount,
+		n.firstBobChannelLink, n.carolChannelLink)
+	blob, err := generateRoute(hops...)
 	if err != nil {
 		t.Fatal(err)
 	}
 
 	// Generate payment: invoice and htlc.
-	invoice, htlc, err := generatePayment(amount, blob)
+	invoice, htlc, err := generatePayment(amount, htlcAmt, totalTimelock,
+		blob)
 	if err != nil {
 		t.Fatal(err)
 	}
@@ -403,8 +413,8 @@ func TestChannelLinkMultiHopUnknownPaymentHash(t *testing.T) {
 	}
 
 	// Send payment and expose err channel.
-	if _, err := n.aliceServer.htlcSwitch.SendHTLC(firstNode,
-		htlc); err == nil {
+	_, err = n.aliceServer.htlcSwitch.SendHTLC(n.bobServer.PubKey(), htlc)
+	if err == nil {
 		t.Fatal("error wasn't received")
 	}
 
@@ -441,7 +451,7 @@ func TestChannelLinkMultiHopUnknownPaymentHash(t *testing.T) {
 // TestChannelLinkMultiHopUnknownNextHop construct the chain of hops
 // Carol<->Bob<->Alice and checks that we receive remote error from Bob if he
 // has no idea about next hop (hop might goes down and routing info not updated
-// yet)
+// yet).
 func TestChannelLinkMultiHopUnknownNextHop(t *testing.T) {
 	n := newThreeHopNetwork(t,
 		btcutil.SatoshiPerBitcoin*3,
@@ -458,13 +468,12 @@ func TestChannelLinkMultiHopUnknownNextHop(t *testing.T) {
 	aliceBandwidthBefore := n.aliceChannelLink.Bandwidth()
 
 	var amount btcutil.Amount = btcutil.SatoshiPerBitcoin
+	htlcAmt, totalTimelock, hops := generateHops(amount,
+		n.firstBobChannelLink, n.carolChannelLink)
 
-	dave := newMockServer(t, "save")
-	invoice, err := n.makePayment([]Peer{
-		n.aliceServer,
-		n.bobServer,
-		dave,
-	}, amount)
+	davePub := newMockServer(t, "save").PubKey()
+	invoice, err := n.makePayment(n.aliceServer, n.bobServer, davePub, hops,
+		amount, htlcAmt, totalTimelock)
 	if err == nil {
 		t.Fatal("error haven't been received")
 	} else if err.Error() != errors.New(lnwire.UnknownDestination).Error() {
@@ -472,6 +481,8 @@ func TestChannelLinkMultiHopUnknownNextHop(t *testing.T) {
 	}
 
 	// Wait for Alice to receive the revocation.
+	//
+	// TODO(roasbeef): add in ntfn hook for state transition completion
 	time.Sleep(100 * time.Millisecond)
 
 	// Check that alice invoice wasn't settled and bandwidth of htlc
@@ -525,11 +536,11 @@ func TestChannelLinkMultiHopDecodeError(t *testing.T) {
 	aliceBandwidthBefore := n.aliceChannelLink.Bandwidth()
 
 	var amount btcutil.Amount = btcutil.SatoshiPerBitcoin
-	invoice, err := n.makePayment([]Peer{
-		n.aliceServer,
-		n.bobServer,
-		n.carolServer,
-	}, amount)
+	htlcAmt, totalTimelock, hops := generateHops(amount,
+		n.firstBobChannelLink, n.carolChannelLink)
+
+	invoice, err := n.makePayment(n.aliceServer, n.carolServer,
+		n.bobServer.PubKey(), hops, amount, htlcAmt, totalTimelock)
 	if err == nil {
 		t.Fatal("error haven't been received")
 	} else if err.Error() != errors.New(lnwire.SphinxParseError).Error() {
@@ -624,7 +635,7 @@ func TestChannelLinkSingleHopMessageOrdering(t *testing.T) {
 	n.aliceServer.record(func(m lnwire.Message) {
 		if getChanID(m) == chanPoint {
 			if len(aliceOrder) == 0 {
-				t.Fatal("redudant messages")
+				t.Fatal("redundant messages")
 			}
 
 			if reflect.TypeOf(aliceOrder[0]) != reflect.TypeOf(m) {
@@ -640,7 +651,7 @@ func TestChannelLinkSingleHopMessageOrdering(t *testing.T) {
 	n.bobServer.record(func(m lnwire.Message) {
 		if getChanID(m) == chanPoint {
 			if len(bobOrder) == 0 {
-				t.Fatal("redudant messages")
+				t.Fatal("redundant messages")
 			}
 
 			if reflect.TypeOf(bobOrder[0]) != reflect.TypeOf(m) {
@@ -657,16 +668,17 @@ func TestChannelLinkSingleHopMessageOrdering(t *testing.T) {
 	}
 	defer n.stop()
 
+	var amount btcutil.Amount = btcutil.SatoshiPerBitcoin
+	htlcAmt, totalTimelock, hops := generateHops(amount, n.firstBobChannelLink)
+
 	// Wait for:
 	// * htlc add htlc request to be sent to alice
 	// * alice<->bob commitment state to be updated
 	// * settle request to be sent back from alice to bob
 	// * alice<->bob commitment state to be updated
-	var amount btcutil.Amount = btcutil.SatoshiPerBitcoin
-	if _, err := n.makePayment([]Peer{
-		n.aliceServer,
-		n.bobServer,
-	}, amount); err != nil {
+	_, err := n.makePayment(n.aliceServer, n.bobServer,
+		n.bobServer.PubKey(), hops, amount, htlcAmt, totalTimelock)
+	if err != nil {
 		t.Fatalf("unable to make the payment: %v", err)
 	}
 }
diff --git a/htlcswitch/mock.go b/htlcswitch/mock.go
index f51dff49..48bf3d8f 100644
--- a/htlcswitch/mock.go
+++ b/htlcswitch/mock.go
@@ -34,7 +34,7 @@ type mockServer struct {
 	name     string
 	messages chan lnwire.Message
 
-	id         []byte
+	id         [33]byte
 	htlcSwitch *Switch
 
 	registry    *mockInvoiceRegistry
@@ -44,9 +44,13 @@ type mockServer struct {
 var _ Peer = (*mockServer)(nil)
 
 func newMockServer(t *testing.T, name string) *mockServer {
+	var id [33]byte
+	h := sha256.Sum256([]byte(name))
+	copy(id[:], h[:])
+
 	return &mockServer{
 		t:           t,
-		id:          []byte(name),
+		id:          id,
 		name:        name,
 		messages:    make(chan lnwire.Message, 3000),
 		quit:        make(chan bool),
@@ -91,24 +95,20 @@ func (s *mockServer) Start() error {
 // mockHopIterator represents the test version of hop iterator which instead
 // of encrypting the path in onion blob just stores the path as a list of hops.
 type mockHopIterator struct {
-	hops []HopID
+	hops []ForwardingInfo
 }
 
-func newMockHopIterator(hops ...HopID) HopIterator {
+func newMockHopIterator(hops ...ForwardingInfo) HopIterator {
 	return &mockHopIterator{hops: hops}
 }
 
-func (r *mockHopIterator) Next() *HopID {
-	if len(r.hops) != 0 {
-		next := r.hops[0]
-		r.hops = r.hops[1:]
-		return &next
-	}
-
-	return nil
+func (r *mockHopIterator) ForwardingInstructions() ForwardingInfo {
+	h := r.hops[0]
+	r.hops = r.hops[1:]
+	return h
 }
 
-func (r *mockHopIterator) Encode(w io.Writer) error {
+func (r *mockHopIterator) EncodeNextHop(w io.Writer) error {
 	var hopLength [4]byte
 	binary.BigEndian.PutUint32(hopLength[:], uint32(len(r.hops)))
 
@@ -117,7 +117,7 @@ func (r *mockHopIterator) Encode(w io.Writer) error {
 	}
 
 	for _, hop := range r.hops {
-		if _, err := w.Write(hop[:]); err != nil {
+		if err := hop.encode(w); err != nil {
 			return err
 		}
 	}
@@ -125,15 +125,33 @@ func (r *mockHopIterator) Encode(w io.Writer) error {
 	return nil
 }
 
+func (f *ForwardingInfo) encode(w io.Writer) error {
+	if _, err := w.Write([]byte{byte(f.Network)}); err != nil {
+		return err
+	}
+
+	if err := binary.Write(w, binary.BigEndian, f.NextHop); err != nil {
+		return err
+	}
+
+	if err := binary.Write(w, binary.BigEndian, f.AmountToForward); err != nil {
+		return err
+	}
+
+	if err := binary.Write(w, binary.BigEndian, f.OutgoingCTLV); err != nil {
+		return err
+	}
+
+	return nil
+}
+
 var _ HopIterator = (*mockHopIterator)(nil)
 
 // mockIteratorDecoder test version of hop iterator decoder which decodes the
 // encoded array of hops.
 type mockIteratorDecoder struct{}
 
-func (p *mockIteratorDecoder) Decode(r io.Reader, meta []byte) (
-	HopIterator, error) {
-
+func (p *mockIteratorDecoder) Decode(r io.Reader, meta []byte) (HopIterator, error) {
 	var b [4]byte
 	_, err := r.Read(b[:])
 	if err != nil {
@@ -141,21 +159,41 @@ func (p *mockIteratorDecoder) Decode(r io.Reader, meta []byte) (
 	}
 	hopLength := binary.BigEndian.Uint32(b[:])
 
-	hops := make([]HopID, hopLength)
+	hops := make([]ForwardingInfo, hopLength)
 	for i := uint32(0); i < hopLength; i++ {
-		var hop HopID
-
-		_, err := r.Read(hop[:])
-		if err != nil {
+		f := &ForwardingInfo{}
+		if err := f.decode(r); err != nil {
 			return nil, err
 		}
 
-		hops[i] = hop
+		hops[i] = *f
 	}
 
 	return newMockHopIterator(hops...), nil
 }
 
+func (f *ForwardingInfo) decode(r io.Reader) error {
+	var net [1]byte
+	if _, err := r.Read(net[:]); err != nil {
+		return err
+	}
+	f.Network = NetworkHop(net[0])
+
+	if err := binary.Read(r, binary.BigEndian, &f.NextHop); err != nil {
+		return err
+	}
+
+	if err := binary.Read(r, binary.BigEndian, &f.AmountToForward); err != nil {
+		return err
+	}
+
+	if err := binary.Read(r, binary.BigEndian, &f.OutgoingCTLV); err != nil {
+		return err
+	}
+
+	return nil
+}
+
 // messageInterceptor is function that handles the incoming peer messages and
 // may decide should we handle it or not.
 type messageInterceptor func(m lnwire.Message)
@@ -218,11 +256,7 @@ func (s *mockServer) readHandler(message lnwire.Message) error {
 	return nil
 }
 
-func (s *mockServer) ID() [sha256.Size]byte {
-	return [sha256.Size]byte{}
-}
-
-func (s *mockServer) PubKey() []byte {
+func (s *mockServer) PubKey() [33]byte {
 	return s.id
 }
 
@@ -247,21 +281,27 @@ func (s *mockServer) Stop() {
 }
 
 func (s *mockServer) String() string {
-	return string(s.id)
+	return s.name
 }
 
 type mockChannelLink struct {
-	chanID  lnwire.ChannelID
-	peer    Peer
+	shortChanID lnwire.ShortChannelID
+
+	chanID lnwire.ChannelID
+
+	peer Peer
+
 	packets chan *htlcPacket
 }
 
-func newMockChannelLink(chanID lnwire.ChannelID,
+func newMockChannelLink(chanID lnwire.ChannelID, shortChanID lnwire.ShortChannelID,
 	peer Peer) *mockChannelLink {
+
 	return &mockChannelLink{
-		chanID:  chanID,
-		packets: make(chan *htlcPacket, 1),
-		peer:    peer,
+		chanID:      chanID,
+		shortChanID: shortChanID,
+		packets:     make(chan *htlcPacket, 1),
+		peer:        peer,
 	}
 }
 
@@ -272,15 +312,19 @@ func (f *mockChannelLink) HandleSwitchPacket(packet *htlcPacket) {
 func (f *mockChannelLink) HandleChannelUpdate(lnwire.Message) {
 }
 
+func (f *mockChannelLink) UpdateForwardingPolicy(_ ForwardingPolicy) {
+}
+
 func (f *mockChannelLink) Stats() (uint64, btcutil.Amount, btcutil.Amount) {
 	return 0, 0, 0
 }
 
-func (f *mockChannelLink) ChanID() lnwire.ChannelID  { return f.chanID }
-func (f *mockChannelLink) Bandwidth() btcutil.Amount { return 99999999 }
-func (f *mockChannelLink) Peer() Peer                { return f.peer }
-func (f *mockChannelLink) Start() error              { return nil }
-func (f *mockChannelLink) Stop()                     {}
+func (f *mockChannelLink) ChanID() lnwire.ChannelID           { return f.chanID }
+func (f *mockChannelLink) ShortChanID() lnwire.ShortChannelID { return f.shortChanID }
+func (f *mockChannelLink) Bandwidth() btcutil.Amount          { return 99999999 }
+func (f *mockChannelLink) Peer() Peer                         { return f.peer }
+func (f *mockChannelLink) Start() error                       { return nil }
+func (f *mockChannelLink) Stop()                              {}
 
 var _ ChannelLink = (*mockChannelLink)(nil)