Is it possible to have 2 ArcGIS for server servers have shared config store but localised Geodatabase. I am concerned about locks on the File Geodatabase if i place them on a file share
Id like to load balance then for better performance and availability
Sure. Don't put your File Geodatabase on a network share though you will want to have an identical copy on each of your GIS Servers.
See here for more information and considerations of using File Geodatabases.
so in a nutshell
1. join servers to a same site
2. configure a share for the config store
3. copy all FGDB data to all the servers at same location and register the folder with the server
on the 10.3.1 i might also need to disable the internal load balancing option as i have an external load balancer.
one last question - do the server need to be in the same site?
You won't need to disable the load balancing on the GIS Servers, though you could if you like. That will reduce the network traffic between the two.
The servers could be the same site or not, up to you. You could use the load balancer to direct the traffic to two individual sites if you want. If you do that though you will have the additional overhead of keeping the servers in sync (you will need to publish services on each individual server).
See here for more detail (especially the Data section):