I always start by preheating my oven to 350°F so it's fully ready by the time my mixture is assembled. While it heats, I pull my cream cheese out early so it has time to soften cold cream cheese is the main reason dips turn lumpy. I also drain my diced chiles if there's excess liquid.
In a mixing bowl, I combine the softened cream cheese, sour cream, garlic powder, salt, and hot sauce first. I like to stir this base until it's completely smooth before adding anything else, since it's much harder to work out lumps once the cheese and chiles go in.
Next, I fold in the diced hatch chiles along with the Monterey Jack and cheddar cheese. I keep the topping cheese separate at this point that gets sprinkled on right before baking so it forms a nice melty crust instead of disappearing into the mix.
I spread the mixture evenly into my small baking dish, smoothing the top with a spatula. This step matters more than people think an even layer bakes more consistently and you won't end up with a scorched edge and a cold center.
I slide the dish into the oven and bake for 15-20 minutes, until the cheese on top is fully melted and just starting to bubble around the edges. If I want a deeper golden top, I'll switch to broil for the last minute or two, watching it closely so it doesn't burn.
I let the dip rest for about 5 minutes after pulling it out; it's molten right out of the oven, and this short rest helps it set up just enough to scoop without running everywhere. Then it's straight to the table with chips.