The inherent nonuniqueness in modeling magnetic data can be partly reduced by adding prior information, either as mathematical constructs or simply as bounds on magnetization obtained from laboratory measurements. If a good prior model can be used as a reference model, then the quality of estimated models through an inverse approach can be greatly improved. But even though data on magnetic properties of rocks might exist, their distribution may often be quite irregular on local and regional scales, so that it is difficult to define representative classes of rock types suitable for constraining geophysical models of magnetization. We have developed a new way of constructing a reference model that varies only laterally and is confined to the part of the terrain that lies above the lowest topography in the area. To obtain this model, several estimated 2D magnetization distributions were constructed by data inversion as a function of the iteration number. Then, a suitable 2D model of the magnetization in the topography was chosen as a starting point for constructing a 3D reference model by modifying it with a vertical decay such that its average source depth was the same for all horizontal positions. The average source depth of the reference model was chosen to satisfy the average source depth obtained from analyzing the radial power spectrum of the area studied. Finally, the measured magnetic data were inverted in three dimensions using the given reference model. For a selected reference model, shallow structures indicated a better overall correlation with large remanent magnetizations measured on rock samples from the area. Throughout the entire model, the direction of magnetization was allowed to vary freely. We found that the Euclidean norm of the estimated model was reduced compared with the case where the magnetization direction was fixed.